Dubai has unveiled plans to sell 25% of its taxi business through an initial public offering (IPO), marking another step in its broader privatization program of state-owned assets.
The announcement was made in a statement released on Monday.
Dubai Taxi Company (DTC), the leading taxi operator in the Gulf city by market share, is set to offer 624.8 million shares, with the listing expected to take place on the Dubai Financial Market in December.
The subscription period for the IPO is scheduled to run from November 21 to November 28 for retail investors in the United Arab Emirates, and from November 29 for other investors, as per the statement.
This move follows Dubai’s successful raising of nearly $8.5 billion from five IPOs in the previous year.
These IPOs were part of the government’s strategy to list 10 state-linked companies, aiming to stimulate stock market activity, address debt obligations, and strengthen capital markets.
However, challenges such as unfavorable market conditions and global economic volatility have slowed down progress in the region this year.
The forthcoming Dubai taxi IPO is poised to be a significant test for a robust pipeline of planned regional listings, extending into the fourth quarter of this year and into 2024.
This effort comes amidst the backdrop of the Israel-Hamas conflict, which has created uncertainty in the markets.
Gregory Hughes, EY’s MENA (Middle East and North Africa) IPO leader, expressed optimism about the prospects for the remainder of 2023 and 2024, despite a slower third quarter.
However, he also noted the risk that investor sentiment could be affected by ongoing geopolitical challenges in the region.
Recently, Investcorp Holding successfully raised over $450 million from an oversubscribed IPO of its investment unit.
This marked the first major public offering from the Middle East since the escalation of the conflict.
In handling the IPO, Dubai Taxi Company has appointed Citigroup Global Markets Limited, Emirates NBD Capital, and Merrill Lynch International as joint global coordinators and bookrunners, along with EFG Hermes UAE and First Abu Dhabi Bank as joint bookrunners.
Rothschild and Co Middle East has been designated as the independent financial adviser.
Earlier, Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai, issued a law transforming the legal status of DTC, formerly known as the Dubai Taxi Corporation, into a public joint stock company with financial and administrative independence.