JEDDAH, 25 August 2004 — SHUAA Capital, lead manager and book runner of the Arab Technical Construction Company (ATCC) initial public offering, has announced that the IPO was oversubscribed about 65 times during the 10-day subscription period that ended yesterday.
“According to early information available to it from the receiving banks, more than 14 billion UAE dirhams in subscriptions were received during the subscription period,” SHUAA Capital said.
The subscriptions were made in response to ATCC’s offering of 220 million shares for sale to the general public at a price of AED 1 per share (plus AED 0.01 in costs). Final figures and allocation between UAE and non-UAE subscribers will take two more days to finalize, it said.
“Despite its offering during the month of August when capital markets have traditionally been less active, ATCC’s IPO was met with a huge response from the investor community. This accomplishment reflects high investor confidence in the founders and in the prospects of the construction sector of the UAE,” said Salam Saadeh, SHUAA Capital’s head of capital markets.
In response to questions about share allocation Saadeh explained: “UAE law limits non-UAE ownership to a maximum of 49 percent of the company’s total 400 million shares. Since in this case 33.75 percent of the shares were previously subscribed by non-UAE founders, no more than 15.25 percent of the issue, amounting to 61 million shares, remained available to non-UAE investors while a minimum of 159 million shares were available to UAE nationals from the 220 million shares on offer. Accordingly, the allocation percentage for UAE nationals will differ from that for non-UAE nationals.”
Written notice will be mailed to all subscribers informing them of the number of shares finally allocated to them. According to the prospectus of the IPO, refunds of oversubscriptions by the receiving banks — Dubai Bank, Emirates Bank International, MashreqBank, and National Bank of Fujeirah — are expected to be mailed out on Sept. 7.
Khaled Sifri, managing director of investment banking at SHUAA Capital, said: “We are very encouraged by the success of this truly pioneering IPO. The experience gained will benefit our clients with whom we are currently engaged in formulating the best means for productively accessing the capital markets. Together with the active support of the relevant government agencies we hope to improve access to the UAE capital markets while ensuring compliance with the highest standards of disclosure and transparency in the financial service industry.”
Iyad Duwaji, CEO of SHUAA Capital, stated that, “most of the companies we are talking to today about going public are in the service industry which comprise over 70 percent of the GDP of the UAE. Theses sectors comprise vibrant growth areas such as distribution and retail, and tourism.”
Established in 1979, SHUAA Capital is today a leading financial investment company licensed by the UAE Central Bank and offers a broad range of financial services and products.