$1 billion = AED 3.67 billion, would make it larger than the largest so far in the UAE - Deyaar IPO in May 2007 worth AED 3.2 billion.
This report from Reuters doesn't say the IPO will be in 2008, but there was a comment in a Financial Times report that it would be within the next 10 months.
I don't see anywhere a direct quote from the Abraaj CEO, Arif Naqvi, that they will do an IPO, the FT said it was "being considered" (see next post).
Should provide a good boost for the DIFX - they could do with a couple of good local listings to generate a bit more activity.
See also UAE IPOs - list of completed and possible IPOs coming up.
Reuters 17 October 2007 wrote:
Abraaj plans $1b IPO in 2008 to finance acquisition
Dubai - Dubai-based private equity firm Abraaj Capital (ABRAAJ) said yesterday it aims to raise about $1 billion selling shares in an initial public offering next year to finance the acquisition of a Middle East finance company.
Abraaj, which manages about $4 billion of assets, plans to sell new shares equivalent to between 20 per cent and 30 per cent of its combined capital in the third quarter and list the stock on the Dubai International Financial Exchange (DIFX), chief executive Arif Naqvi said.
"We are going to a buy a financial services asset in the Middle East," Naqvi said, declining to be more specific. The purchase will cost "significantly" more than $1 billion, he said.
Abraaj said on Tuesday it attracted $1.2 billion for an infrastructure fund it manages that has invested in assets including a stake in Sharjah-based Air Arabia (AIRARABIA) and in taking over an Egyptian fertiliser company. It plans to close the fund at $2 billion by the end of the year.
Abraaj is close to hiring a financial adviser to help arrange the IPO, Naqvi said.
Dubai set up the DIFX in 2005 to operate according to international regulatory standards, and encourage local companies to sell shares to the public and for foreign companies to tap the region's oil-driven wealth.
The Nasdaq Stock Market Co will take a 33 per cent stake in the DIFX under an agreement with DIFX parent company Borse Dubai involving their takeover of Nordic and Baltic share markets owner and technology company OMX AB.
Some information about Abraaj Capital from a press release about their Infrastructure and Growth Capital Fund on the same day as the IPO news...
Press Release 17 October 2007 wrote:
About Abraaj Capital
Abraaj Capital is the premier investment firm specialising in private equity investment in the Middle East, North Africa and South Asia (MENASA) region. The management team has brought together some of the most compelling and successful transactions in the history of leveraged acquisitions across the region.
With close to US$4 billion of assets currently under management, Abraaj has pioneered institutionalising private equity practice in the region and is setting trends and benchmarks for others to follow.
Abraaj is the winner of industry awards including 'Middle East Private Equity Firm of the Year' from Private Equity International (2006 & 2007), the Banker Middle East Award for 'Best Private Equities Institution' in 2006 and for 'Outstanding Contribution to Financial Services in the Middle East' in 2007. Arabian Business recently recognized Abraaj among the 50 Most Admired Companies in the GCC. Abraaj is also the first pure private equity firm to be registered by Dubai Financial Services Authority to operate out of the Dubai International Financial Centre.
IGCF is Abraaj Capital's seventh fund. In addition, Abraaj Capital Holdings Limited (ACHL) is also the single largest shareholder in the leading regional investment bank EFG-Hermes. ACHL itself is extremely well capitalized, with an issued share capital of US$1 billion. Its 135 employees come from 27 nationalities and achieve a coverage that spans the MENASA region.
FT report about the Abraaj IPO says it is under consideration. I don't see any statement from the CEO that an IPO is definitely happening...
Financial Times 17 October 2007 wrote:
Abraaj considering $1bn Dubai float
By Simeon Kerr in Dubai
The Dubai International Financial Exchange (DIFX) got a much-needed boost on Tuesday when investment group Abraaj Capital (ABRAAJ) said it was considering floating 20 to 30 per cent of the company in an initial public offering of up to $1bn.
Arif Naqvi, the chief executive of Dubai-based Abraaj, said an IPO would open up the largest privately held portfolio of Middle East investments to international investors.
He declined to value the company, but said it would ideally want to raise $1bn in additional capital through the offering, which could take place over the next 10 months.
"I think we ... can play a strong role in helping the market find its feet," he told the Financial Times
Dubai ports operator DP World, the world's third-largest container port operator, is rumoured to be converting its Islamic bond into a share listing on the underperforming DIFX next month.
Unlike DP World, which is considering a secondary listing in the UK, Abraaj would probably only list shares on the Dubai exchange.
DIFX, launched in September 2005, has struggled to attract interest, with only a handful of listings and low trading volumes. It is to be rebranded under the Nasdaq name as part of the Dubai government's proposed tie-up with the US group to buy Nordic operator OMX.
Abraaj, privately held by various regional investors, currently has $4.6bn of assets under management and company capital of $1bn, but this is expected to rise with fresh capital and the launch of a new fund next year. It only invests in the Middle East, North Africa and south Asia, benefiting from the Gulf's oil surpluses, which have fuelled unprecedented investment across the broader region.
Industry sources said it would be a challenge for Abraaj to raise assets under management to a level warranting raising $1bn.
Abraaj also announced on Tuesday it had raised $1.2bn during the credit squeeze for its Infrastructure and Growth Capital Fund, with 30 per cent coming from outside the region. The largest single Mideast-focused private equity fund, in partnership with Deutsche Bank, will be capped at the end of this year at $2bn.
Abraaj has only seen a slight increase in borrowing costs because of the credit crisis, Mr Naqvi said. The firm generally leverages its transactions at a "conservative" level of 50 to 60 per cent debt, he said, while maintaining rates of return of 30 to 40 per cent.
In a rare move from the polluting and energy inefficient Gulf, Abraaj will also attempt to make all investments in its infrastructure fund - from airlines to fertiliser firms - carbon neutral within five years.
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