Tecom offers 625 million shares on the Dubai Financial Market

Tecom Group, a member of the Dubai Holding group, on Thursday announced its intention to proceed with an Initial Public Offering (IPO) and to list its ordinary shares for trading on the Dubai Financial Market (DFM).

Tecom is the owner, manager and operator of 10 strategic, sector-focused business districts across Dubai and a major contributor to the rapid growth of Dubai’s knowledge and innovation-based economy.

The company announced that 625,000,000 ordinary shares will be made available in the Global Offering, representing 12.5 per cent of Tecom Group’s issued share capital. The Global Offering comprises the Qualified Institutional Offering, the Exempt Offer, and the UAE Retail Offer.

All the shares are existing shares being sold by the Selling Shareholder, and the company will not receive any proceeds from the Global Offering.

The Qualified Institutional Offering and the Exempt Offer subscription period is expected to run from June 16th-24th, 2022.

The UAE Retail Offer subscription period is expected to run from June 16th-23rd, 2022. Admission of shares to trading on the DFM is anticipated on July 5, 2022.

DHAM (Dubai Holding Asset Management or Selling Shareholder) reserves the right to amend the size of the Global Offering at any time prior to the end of the subscription period, subject to the approval of the SCA. DHAM is Tecom Group’s majority shareholder, and Dubai Holding is its ultimate holding company.

The Internal Sharia Supervision Committees of Emirates NBD Bank and First Abu Dhabi Bank have issued pronouncements confirming that, in their view, the Global Offering is compliant with Shariah principles.

Tecom Group intended to adopt a semi-annual dividend distribution policy to pay dividends in cash after the Global Offering in October and April of each year, subject to the Board of Directors and General Assembly’s approval.

The company is expected to pay a dividend amount of Dhs800 million per annum over the next three years (through to October 2025).

The company’s ability to pay dividends depends on a number of factors, including the availability of distributable reserves, the company’s capital expenditure plans, and market conditions.

The Group is a central player in Dubai’s business hub proposition, strongly positioned to benefit from Dubai’s broader commercial real estate market recovery and macroeconomic tailwinds.

Tecom is the owner and operator of an iconic, high-quality, and resilient real estate portfolio strategically located across Dubai that offers a business-friendly regulatory regime, supported by value-added services.

It has a long-term and diversified international and regional marquee customer base. The company also have an attractive financial profile and balance sheet underpinned by a robust income-generating portfolio that has delivered consistent, high-quality revenue and cash flow.

The company has a robust governance framework and sustainability to be further embedded in the core of the operating model, along with a dynamic management team with a proven track record and supportive shareholder.

It has a clear roadmap for achieving growth objectives and continuing to deliver strong performance over the medium term. It benefits from the support of Dubai Holding as a committed ultimate holding company. Dubai Holding has a reputation for excellence in Dubai as a key driver of economic diversification and enabler of the Dubai government’s vision.

? Commenting on the launch of the TECOM Group IPO process, Amit Kaushal, Dubai Holding Group Chief Executive Officer, said, “As Dubai Holding’s primary commercial development and leasing business, TECOM Group has helped execute our key role in diversifying Dubai’s economy and driving innovation and business growth and development. We have supported its growth into a successful creator of innovative business ecosystems and a partner of choice for multinational businesses as well as entrepreneurs in the region.

“We believe Tecom Group is ready to embark on a new chapter as a publicly listed company. By remaining the company’s ultimate holding company, we will remain fully committed to working alongside Tecom Group’s new shareholders to support its growth ambitions and further bolster its role as a key enabler of Dubai and the region’s knowledge-based economy.” Malek Al Malek, Chairman of Tecom Group, said, “Our visionary leadership has consistently set new objectives in business excellence and competitiveness, consolidating Dubai’s global position as a leading business and talent hub. For more than two decades, Tecom Group has been the cornerstone of these ambitions, contributing to the nation’s knowledge economy by attracting global companies and skilled talent across six key sectors and boosting the ease of doing business.

WAM