See also UAE IPOs - list of IPOs and new listings on the UAE stockmarkets
WAM 30 August 2007 wrote:
Sheikh Khalifa amends IPO law for family owned business
ABU DHABI — The President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, has issued Federal Law No. 10 for 2007, pertaining to amending some provisions of Federal Law No. 8 for 1984 on commercial companies.
The law provides for a new definition of the local family-owned businesses that convert into public companies, allowing them to list a minimum stake of 30 per cent. Article 1 of the law provides for addition of a new article to the existing article no. 273 of the Law No. 8 for 1984. The new article defines local family business as a company fully owned by members of one family extending up to fourth generation.
The law also allows local family-owned businesses that convert into public companies to retain a maximum stake of 70 per cent and to list a minimum stake of 30 per cent. The law shall be published in the official gazette and shall come into effect on the date of its publication.
Hmmm... ShareWadi could be busy adding all these companies planning on IPOs to the website?
Gulf News 30 Aug 2007 wrote:
Business community welcomes decision to lower IPO ceiling
By Saifur Rahman, Business News Editor
Dubai: The UAE's business community largely welcomed yesterday's announcement by the government lowering the initial public offering ceiling from 55 per cent to 30 per cent.
President His Highness Shaikh Khalifa Bin Zayed Al Nahyan decreed Federal law no 10 2007 amending the 1982 Federal Law No. 8 on Commercial Companies.
Local companies
The new law includes a definition for local family companies, where partners may keep no more than 70 per cent of the capital, while 30 per cent may be sold.
The new law will encourage the UAE family-owned companies to go public as it brought down the initial public offering ceiling down to 30 per cent, from the existing 55 per cent, allowing family owners to retain the majority of the stakes.
Stock market boost
"This is a welcome news. This will encourage a lot of family-owned companies to go public and it will boost the stock market," Dr Khalid Maniar, investment advisor and partner of the AGN MAK, told Gulf News yesterday.
"The family companies have been shying away from going public as they were to give up controlling stake. Now, under the amendment, they will not have to give up controlling stake, while going public."
The move is being viewed by the UAE's business community as part of the government's commitment to further liberalise the market and attract foreign investment.
"This is another far-sighted step of President His Highness Shaikh Khalifa Bin Zayed Al Nahyan in positioning the UAE as one of the most investor friendly economies in the world," Yousuf Ali M.A. managing director of Emke Group and director and board member of the Abu Dhabi Chamber of Commerce and Industry (ADCCI), told Gulf News yesterday.
"No doubt, this will further enhance the foreign direct investment into the already booming UAE economy and will result in all-round development of various industries.
Revised ceiling spurs family firms to offer IPOs
By Robert Ditcham, Staff Reporter
Dubai: Family-owned businesses in the UAE yesterday said a new law allowing them to retain control of their businesses after an initial public offering (IPO) have dramatically increased the chances of their going public.
President His Highness Shaikh Khalifa Bin Zayed Al Nahyan decreed Federal law No 10 2007, which stipulates that UAE nationals will be allowed to sell 30 per cent stocks and retain 70 per cent of shares. The previous requirement discouraged family-owned businesses from listing because they would lose majority ownership.
"The 55 per cent ceiling was totally unacceptable and was the top barrier to companies going public. A 20 per cent ceiling would have been even better," said Hussain Sajwani, chairman of Damac Holding. He said Damac Holding may now consider launching IPOs for some of its companies.
Al Habtoor Group LLC, whose interests span construction, real estate and hotels, said it may offer IPOs in 2008 after the law made it easier for family owned businesses to list.
"Maybe in 2008 we will think about when we will do the IPO. The change favours big family-owned businesses - at least the control will remain with them now," CEO Mohammad Khalaf Al Habtoor was quoted as saying by Bloomberg. Other companies encouraged by the law include Damas Jewellery, controlled by Dubai's Abdullah family, which plans to raise Dh1.3 billion in an IPO in the first quarter, said Tawhid Abdullah, managing director.
Abu Dhabi-based Al Sayegh Brothers, whose five companies operate in industries including oil services, plan to sell shares in one of their units before the end of 2008, said Abdul Jabbar Al Sayegh, chief executive of the 25-year-old firm.
Al Fahim Group IPO - may do IPOs for hotel and property divisions. 'Rmal Hospitality' is their hotel and restaurant subsidiary
Al Habtoor Group IPO - may go public in 2008
Damas Group IPO - AED 1.5 bn IPO in 2008 Q1 to raise share capital to AED 4.5 billion, listing maybe on DIFX and London
Emirates Today 31 Aug 2007 wrote:
Families line up series of public issues
MATT SMITH BUSINESS REPORTER
UAE investors can look forward to a wave of share floatations as the country’s family and privately owned companies exploit a change in federal law that will allow them to retain a majority stake after an initial public offering.
The amendment permits firms to retain a 70 per cent stake, while previously the maximum was 45 per cent.
“The markets have been waiting for this change to arrive,” Amer Halawi, the National Investor securities director, told Bloomberg.
“The impact might be immediate as a lot of family owned businesses want to raise public money but have not because they do not want to lose control.” Al Habtoor Group, Damas and Al Fahim Group were among the leading UAE private firms to welcome the move, with all three yesterday revealing they would now be looking to launch IPOs.
“This change favours big family owned businesses. At least the control will remain with them now,” Mohammad Khalaf Al Habtoor, Chief Executive of the Al Habtoor Group, told Bloomberg.
The group, whose interests include engineering, hospitality and real estate, may now go public next year, he said.
The UAE-based jewellery retailer Damas also said it was aiming for an IPO. The company plans to raise about Dh1.5 billion selling new shares in the first quarter of 2008, increasing the company’s share capital by 25 per cent to Dh4.5bn.
“We are now an international company, we are looking at a combination of the DIFX (Dubai International Finance Exchange) and London,” managing director Tawhid Abdullah told Bloomberg.
Meanwhile, Abu Dhabi’s Al Fahim Group may sell shares in its hotel and property divisions. “We can take some of the group’s companies public in order to establish a wider footing and basis for future business,” Bloomberg quoted chairman Mohammed Al Fahim as saying.
The probable IPO boom is unlikely to lead to the UAE stock markets being included in Morgan Stanley Capital International (MSCI) indices, according to a note from Standard Chartered Bank. These indices serve as investment benchmarks.
The note states: “A mixture of low-market capitalisations, low free float and restrictions on foreigners directly owning equities has meant interest thus far has been limited.
“Against this backdrop, further steps are likely to be necessary for MSCI to increase its coverage of the region.” It adds that “all eyes are on Saudi, as the region’s biggest economy, to see whether it will open up to foreigners’ directly owning equities’.
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