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Dubai's Depa eyes up to $516 Million IPO - ASHARQ AL-AWSAT English Archive
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DUBAI, (Reuters) – Dubai-based interiors contractor Depa Ltd said on Sunday it could raise as much as $516 million in an initial public offering this month to help finance expansion, including acquisitions and entering new markets.

Like many real-estate-related companies in the Gulf, Depa is benefiting from a construction boom in the world’s biggest oil-exporting region, fuelled by a five-fold increase in oil prices during the last six years.

The company, whose contracts include fitting out Dubai’s Burj al-Arab hotel, plans to sell as many as 278.91 million shares at between $1.50 and $1.85 each, and global depositary receipts (GDR) at between $7.50 and $9.25, it said in a statement.

That includes an over-allotment option of 25.36 million shares, representing a total of as much as 43 percent of the company, it said. That would value the company at about $1.2 billion. Most of the shares will be new.

“We will use the new proceeds we plan to raise to enter new markets and further strengthen our position in existing markets through acquisitions,” company Chairman Mohannad Sweid was quoted as saying in the statement.

BOOKBUILDING

The final share price will be based on a book-building exercise and the value of orders the company receives, it said.

As well as financial institutions, the sale is open to citizens of the six Gulf Arab oil producers, including Saudi Arabia and Kuwait, and to residents of the United Arab Emirates, where Depa is based, it said.

The sale to individuals starts on Sunday and will end around April 13, with the offer price announced about five days later, Depa said. The ordinary shares will list on the Dubai International Financial Exchange (DIFX) and the GDRs in London.

The sale coincides with that of Dubai-based Future Pipe Industries, whose IPO starts on April 13. It aims to raise at least $400 million, people familiar with the transaction have told Reuters.

The Depa flotation will be the third primary listing on DIFX, which the emirate set up in 2005 to encourage local companies to sell shares to the public, and for foreign companies to tap growing regional wealth.

Depa’s net profit last year surged 72 percent to 160.5 million dirhams ($43.71 million) on revenue of about 1.4 billion dirhams, it said last month.

Morgan Stanley & Co, UBS AG, finance company The National Investor (TNI) and Kuwait’s Global Investment House are advising Depa on the IPO. TNI and Global have a stake in Depa.

Depa said last week it won a 375 million UAE dirham ($102.1 million) contract to fit out metro stations in Dubai in a joint venture with Germany’s Lindner Group.

In 2005, Depa won a $163 million contract to fit out apartments in Emaar Properties’s Burj Dubai project, which includes the world’s tallest building.

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Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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