Empower to sell 10pc stake, list on Dubai Financial Market
DUBAI, October 24, 2022
Emirates Central Cooling Systems Corporation (Empower) has announced its intention to proceed with an initial public offering (IPO) and to list a portion of its ordinary shares for trading on the Dubai Financial Market (DFM).
In a press conference today (October 24), Empower said that one billion shares, each with a nominal value of AED0.10 (ten fils) will be made available in the IPO, representing 10% of Empower's total existing share capital.
The Emirati group said that all shares to be offered represent the sale of existing shares held in aggregate by Dewa and Emirates Power (an indirectly wholly owned subsidiary of Dubai Holding) with Dewa selling 7% and Emirates Power selling 3% in the offering.
The corporation added that the selling shareholders reserve the right to amend the size of the IPO (in whole and/or individual tranches) at any time before the end of the subscription period of the Second Tranche, subject to applicable laws and approval by the Securities and Commodities Authority (SCA).
The subscription opens on October 31 and is expected to close on November 7 for the UAE retail investors and November 8 for qualified investors.
The Internal Sharia Supervision Committee of Emirates NBD Bank has issued a pronouncement confirming that, in its view, the IPO is compliant with shariah principles.
The company's existing share capital consists of 10 billion ordinary shares, each with a nominal value of AED0.10, which are fully paid, issued and outstanding.
Following the Offering, Empower intends to adopt a semi-annual dividend distribution policy and to pay dividends twice each fiscal year after the Offering in April and October of each year.
The group expects to pay a minimum dividend amount of AED850 million per annum, in the first two fiscal years following the Offering (April 2023 to October 2024).
Empower expects to distribute its first dividend payment of a minimum of AED425 million after the Offering, for the second half of 2022, by April 2023. After the October 2024 distribution, the Company expects to pay a sustainable dividend in line with the growth of the business.
This dividend policy is designed to reflect the Company's expectation of strong cash flows and expected long-term earnings potential, while allowing the Company to retain sufficient capital to fund ongoing operating requirements and continued investment for long-term growth.
This dividend policy is subject to consideration of the Board of Directors of the cash management requirements of the Company's business for operating expenses, financing expenses and anticipated capital expenditures.
In addition, the Company expects that the Board of Directors will also consider market conditions, the then current operating environment in the Company's markets, and the Board of Directors' outlook for the Company's business.
Chairman Saeed Mohammed Ahmad Al Tayer said Empower's ability to continuously leverage its scale and knowledge qualifies the company to be well-positioned for growth in markets where district cooling plays an important societal role.
"At the heart of our strategy is supporting Dubai's energy transition; by providing access to sustainable cooling solutions and increased energy efficiency, better water efficiency, and encouraging responsible energy consumption. Empower long-term principles ensure inclusion, empowerment, diversity and gender equality."
CEO Ahmad bin Shafar said: "With a targeted market share of 80% in Dubai by the end of 2022, Empower supports and benefits from the city's fast-paced economic growth. This includes mega-trends such as expansion in infrastructure, a rising population and hot climates, which continue to accelerate the need for more efficient and sustainable cooling at scale."
"As a leading player in the implementation of district cooling technology as well as the deployment of a more sustainable cooling method in Dubai, Empower provides investors with a unique opportunity to invest in a Company that operates in a market that has solid macroeconomic fundamentals for district cooling, making it a growth engine for Empower," he added.-TradeArabia News Service
