Eshraq Properties raises $225m in IPO
Abu Dhabi, May 12, 2011
UAE property firm Eshraq raised Dh825 million ($225 million), its target amount, in an oversubscribed offer that signals renewed interest in the battered property sector, bankers said on Thursday.
Eshraq's initial public offering, the first by a real estate firm since the UAE's property boom collapsed in 2008, closed on Wednesday. The Abu Dhabi-based firm has total capital of Dh1.5 billion and offered 55 per cent through the IPO. It plans to list on the Abu Dhabi exchange.
'The company offered 825 million shares and the demand was more than that with quality institutional and retail investors participating,' Majd Maaitah, head of securities at National Bank of Abu Dhabi, told Reuters.
He declined to say how many times it was over-subscribed as numbers were still being finalised.
NBAD acted as lead receiving bank and investment firm Royal Capital was lead manager for the IPO which launched on May 1.
'That Eshraq, being in the real estate sector was able to raise the amount is a sign of success. It will be an added value to the stock market,' a banker involved in the IPO said.
Esraq plans to use the funds for to finance current and future developments, it said ahead of the IPO. Some 70 per cent of Eshraq's future developments will be in the UAE and 30 per cent in Saudi Arabia.
Eshraq plans to invest Dh2.3 billion over the next three years in developing property. NBAD's Maaitah said Eshraq could list on the Abu Dhabi Securities Market (ADX) within two months. - Reuters