Empower IPO: Dubai district cooling company raises $724m in oversubscribed offering

Emirates Central Cooling Systems Corporation (Empower), Dubai's district cooling provider, has raised more than Dh2.6 billion ($724 million) through its initial public offering.

The IPO drew strong demand from local, regional and international investors and was more than 47 times oversubscribed.

The company sold 2 billion shares, equivalent to 20 per cent of its share capital, at the higher end of its offer share price of Dh1.33, giving Empower a market value of Dh13.3bn ($3.6bn) at listing.

The retail offering was 49 times oversubscribed with demand collected in excess of Dh19.6bn, while the qualified investor tranche was 46 times oversubscribed, drawing Dh105bn.

The UAE Strategic Investment Fund, Shamal Holding and the Abu Dhabi Pension Fund were cornerstone investors in the IPO, with a total commitment of up to Dh335m.

"This incredible investor interest is deeply encouraging and illustrates that Dubai is a thriving dynamic international financial centre with real depth and growing demand to its capital markets. It also demonstrates Empower’s strong fundamentals and our company’s value proposition,” said Saeed Mohammed Al Tayer, chairman of Empower.

The size of the IPO was increased from an initial 10 per cent announced last month, and another upward revision to 15 per cent at the start of November.

Empower is expected to start trading on the Dubai Financial Market on November 15 under the symbol “EMPOWER” and will be the world’s largest district cooling services provider that is publicly traded.

The Dubai Electricity and Water Authority and Emirates Power Investment (EPI) will retain 56 per cent and 24 per cent of Empower’s existing share capital respectively following the listing.

The Empower offering is part of Dubai's plans to bolster the size of its capital markets, with plans to list 10 state-owned companies and boosting the size of the emirate's financial market to about Dh3 trillion.

The emirate is also aiming to set up a Dh2bn market maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.

Empower was established by royal decree as a joint venture in 2003 to provide energy through its various plants to the emirate's property sector.

The company will have 81 district cooling plants by the end of 2022 and a network that is more than 350 kilometres long, its website said.

“This is a historic moment for both Empower and Dubai," said Ahmad Bin Shafar, chief executive of Empower.

"Mega-trends such as expansion in infrastructure, a rising population and warmer climates continue to accelerate the need for more efficient and sustainable cooling at scale.

"At the heart of Empower’s strategy is supporting Dubai’s energy transition, by providing access to sustainable cooling solutions, increased energy efficiency and encouraging responsible energy consumption.”