Dubai Taxi Company will offer up to 24.99 per cent stake in an initial public offering, after being set up as a public joint-stock company as part of Dubai's push to broaden its capital markets.
The company, established under a new law passed by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, will offer 624.75 million shares in the public float on the Dubai Financial Market and will have “financial and administrative independence”, Dubai Media Office said on Sunday.
The Department of Finance, representing the government of Dubai, will retain the remaining 75.01 per cent shareholding, the company said in a prospectus. The selling shareholder retains the right to modify the size of the offering.
The subscription period for retail and institutional investors begin open on November 21. Retail investors' tranche is set to close to on November 28, while the subscription period for qualified institutional investors for the deal will end on November 29.
As part of the qualified investor offering, 5 per cent will be reserved for the Emirates Investment Authority and 5 per cent for the Pensions and Social Security Fund of Local Military Personnel.
The final offer price will be announced on November 30 and the expected date of listing is December 7, according to the prospectus.
"Benefitting from Dubai’s exceptional infrastructure and an ambition to double the size of its economy by 2033, supported by the Dubai Urban Master Plan 2040 ... Dubai Taxi Company remains key to the growth, mobility and sustainability vision of Dubai," said Abdul Kalbat, chairman of Dubai Taxi Company.
"Through this offering, DTC is proud to support the continuation of the privatisation programme pursued by Dubai, providing a further opportunity for foreign investment."
Dubai announced plans in November 2021 to list 10 state-owned companies to increase the size of its financial market to Dh3 trillion ($816.8 billion), as well as set up a Dh2bn market-maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.
Four of the announced 10 state-owned enterprises listed on Dubai Financial Market last year.
The listing of Dubai Electricity and Water Authority was the largest GCC IPO last year, raising $6.1 billion.
Dewa's offering size was more than doubled to 8.5 billion shares amid strong investor demand.
State-owned Tecom, Salik and Empower collectively raised $2.2 billion in June, September and November 2022, respectively.
Overall, Middle East IPOs raised more than $23 billion in 2022, compared with $7.52 billion from 20 offerings in the previous year.
That was the highest share for the Gulf region after 2019, when Saudi Aramco went public in a $29 billion offering, the world’s largest.
Dubai Taxi Company was founded in 1995 and has a fleet of about 6,000 vehicles that service Dubai's growing population.
The number of people living in the emirate hit 3.61 million in April 2022, and the population is expected to rise to 5.8 million by 2040.
About 96 million journeys were made on Dubai's fleet of taxis in the first half of this year – with hybrid vehicles accounting for more 70 per cent of the cars in service.
The new law on Dubai Taxi Company also specifies its objectives. These include providing transport services using taxis “and offering specialised transportation using self-driving vehicles and flying taxi services, with adherence to existing regulations”, the media office said.
Dubai Taxi Company is also involved in leasing vehicles with or without drivers, facilitating the provision of qualified drivers and engaging in leasing of bikes for cargo transport companies.
It is permitted to outsource passenger transportation services through contractual agreements with interested companies and entities.
For the fourth quarter of 2023, DTC expects to distribute a first dividend of at least Dh71 million to be paid in April 2024, it said.
Starting from the fiscal year 2024, the company intends to pay dividends twice each year in April and October, it said.
As part of its dividend policy, an earnings-linked framework with a minimum of 85 per cent of annual net profit will be made available for distribution.
"The dividend policy is designed to reflect the company's expectation of strong cash flows and expected long-term earnings potential, while allowing the company to retain sufficient capital to fund ongoing operating requirements and continued investment for long-term growth," it said.
Emirates NBD Capital, First Abu Dhabi Bank and EFG Hermes UAE have been appointed as the joint lead managers for the IPO.
The lead receiving bank is Emirates NBD.
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A new relationship with the old country
Treaty of Friendship between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates
The United kingdom of Great Britain and Northern Ireland and the United Arab Emirates; Considering that the United Arab Emirates has assumed full responsibility as a sovereign and independent State; Determined that the long-standing and traditional relations of close friendship and cooperation between their peoples shall continue; Desiring to give expression to this intention in the form of a Treaty Friendship; Have agreed as follows:
ARTICLE 1 The relations between the United Kingdom of Great Britain and Northern Ireland and the United Arab Emirates shall be governed by a spirit of close friendship. In recognition of this, the Contracting Parties, conscious of their common interest in the peace and stability of the region, shall: (a) consult together on matters of mutual concern in time of need; (b) settle all their disputes by peaceful means in conformity with the provisions of the Charter of the United Nations.
ARTICLE 2 The Contracting Parties shall encourage education, scientific and cultural cooperation between the two States in accordance with arrangements to be agreed. Such arrangements shall cover among other things: (a) the promotion of mutual understanding of their respective cultures, civilisations and languages, the promotion of contacts among professional bodies, universities and cultural institutions; (c) the encouragement of technical, scientific and cultural exchanges.
ARTICLE 3 The Contracting Parties shall maintain the close relationship already existing between them in the field of trade and commerce. Representatives of the Contracting Parties shall meet from time to time to consider means by which such relations can be further developed and strengthened, including the possibility of concluding treaties or agreements on matters of mutual concern.
ARTICLE 4 This Treaty shall enter into force on today’s date and shall remain in force for a period of ten years. Unless twelve months before the expiry of the said period of ten years either Contracting Party shall have given notice to the other of its intention to terminate the Treaty, this Treaty shall remain in force thereafter until the expiry of twelve months from the date on which notice of such intention is given.
IN WITNESS WHEREOF the undersigned have signed this Treaty.
DONE in duplicate at Dubai the second day of December 1971AD, corresponding to the fifteenth day of Shawwal 1391H, in the English and Arabic languages, both texts being equally authoritative.
Signed
Geoffrey Arthur Sheikh Zayed
