Emaar Properties PJSC yesterday announced its intention to proceed with the sale of existing shares in Emaar Malls Group (EMG) via an initial public offering (IPO) on the Dubai Financial Market (DFM).
The IPO will be made available to individual investors (30 percent), as well as qualified institutional investors (70 percent), with 10 percent being targeted for preferential allocation to existing Emaar Properties shareholders as at 10th September 2014. Emaar Properties expects to sell at least 15 percent of EMG as part of the IPO.
Emaar Malls Group, the developer of the iconic Dubai Mall, recorded revenues of Dh 1.250 billion (US$ 340 million) during the first six months of 2014. This is 13 percent higher than the H1 2013 revenue of Dh 1.106 billion (US$ 301 million). The Q2 2014 malls revenue is Dh 650 million (US$ 177 million), 11 percent higher than Q2 2013 revenue of Dh 584 million (US$ 159 million).
Whilst valuation will be dependent upon the book building process, Emaar Properties will earmark approximately Dh 5.3billion (US$ 1.44billion) from the IPO proceeds to be paid as a dividend. This amount aggregated with the dividend received from EMG prior to the IPO of Dh 3.7billion (US$ 1.01billion) will allow Emaar Properties to pay a dividend of approximately Dh 9billion (US$2.45billion) to its shareholders.
Mohamed Alabbar, Chairman of Emaar Properties, said, "The intention to generate proceeds for Emaar Properties by listing EMG shares on DFM will continue the established trend of returning funds from the group to shareholders. This underlines Emaar Properties commitment and gratitude to our shareholders for their dedication and loyalty since 1997. Additionally, the IPO of EMG is a milestone for the development of the U.A.E. capital markets as, for the first time, it combines institutional and retail shareholders in the same offering on the DFM. This further demonstrates Emaar Properties pioneering role in the U.A.E. capital markets, having been the first company to list on the DFM in the year 2000.
"Emaar Malls Group has delivered strong growth and profitability in the last six years that has enabled it to make substantial investments which are expected to increase its GLA by around one million square feet by 2016 and enhance the group's revenue and margins. As the owner of EMG, Emaar Properties is excited about the future growth of the Group and will do its upmost to ensure that the business continues to flourish in this new stage of its development."