I don't know anything about Al Rayan but it's certainly been a week for IPO news in the UAE, and news today of the massive upcoming Visa IPO in the USA.
I did read that Al Rayan Investments owns a stake in Sorouh Real Estate (SOROUH).
As far as I know, there's no connection between Al Rayan Investments, and Al Rayan Bank (or Masraf Al Rayan) in Qatar which had a Dh4 billion IPO in 2006.
WAM 25 February 2008:
Al Rayan plans IPO says chairman
The chairman of the board of Al Rayan Investment Company (AlRayan), which will build the first city for low-income students in Abu Dhabi, said he plans to take the company public later this year.
Fardan Al Fardan was speaking at the inauguration of Al Rayan’s main office in the capital yesterday.
National Security Adviser Sheikh Hazza bin Zayed Al Nahyan oversaw the launch ceremony and met Al Rayan’s board and was briefed on the company’s projects and strategic plans as well as future projects to be launched in Abu Dhabi, the UAE and the region.
Last week, the investment firm announced it put up Dh1 billion in capital to cover the building expenses for the capital’s first housing development aimed at students with limited income. About 350,000 people in the country are in need of such housing, according to a study carried out by the company.
Chairman Al Fardan said his company would start to execute the project once it gained approval from government departments. The largest part of the plan will extend more than 2.5 million square feet and will be ready in 18 months.
Al Fardan said the project would have advance design features to ensure that students have the opportunity to live in modern and comfortable style.
Meanwhile, he also said the company has plans to expand to other emirates and some Gulf countries, such as Qatar and Saudi Arabia.
Al Fardan added that Al Rayan intends to become a publicly traded company later this year.
Al Rayan was established as a private joint stock company with capital of Dh500m. The value of its investments has grown to reach more than Dh2.5bn. It has a number of investment projects scheduled to be implemented over the next three years with investments of Dh6bn.
Some 90 per cent of the company’s investments are currently in the real estate sector, seeking to benefit from the increasing demand for accommodation in Abu Dhabi and the sharp shortage of supply.
The company has other investments in shares, securities, alternative energy and logistics. The board decided recently to restructure the company to concentrate on three sectors – real estate, services and industry.
Currently Al Rayan is carrying out four property developments.
The first is a residential city for workers in Al Mussafah Industrial. It will accommodate around 25,000 workers and cost Dh850m.
The second project is a temporary residential project for workers. It will accommodate around 32,000 workers and cost Dh418m. The third project is a Dh200m building at Dana Abu Dhabi project. The building will have unfurnished apartments, furnished studios and a market.
The fourth project is located in the exhibition grounds in Abu Dhabi.
It will contain a hotel, offices and shops. The project’s cost ranges between Dh500m and Dh600m.
In the recent past, the joint stock company unveiled plans to construct a residential city in Abu Dhabi with a value of Dh1bn.
Fardan Hasan Al Fardan, chairman of Al Rayan, has announced that the company is hoping to launch an IPO before the end of the year.
Abu Dhabi - Al Rayan Investment, which invests in real estate and industry in the UAE, said yesterday it won shareholder approval to sell stock to the public for the first time to finance expansion.
"We have a strong pipe-line of interesting projects presently that requires additional capital," Fardan Hasan Al Fardan, chairman of Al Rayan said after the company's annual general meeting in Abu Dhabi.
"We plan to launch the IPO, possibly by the end of 2008 or early 2009," Fardan said.
"The percentage of shares that will be offered to the public will depend on the time of the year and the new law that may allow us to offer 30 per cent," Fardan said.
Al Rayan's profit doubled to Dh90 million ($24.51 million) last year and should more than double again this year, Fardan said. This year's first quarter profit is almost Dh90 million, he said.
Emirates Business 24-7 had a lengthy interview with the Chairman of Al Rayyan Investments, including a bit of IPO information. Well, not much actually, just that it would be announced "later". Still, that's better than saying "coming soon" for a couple of years, and then pulling the plug at the last minute - I guess the Al Qudra IPO debacle means Mr Al Fardan, as Deputy Chairman of Al Qudra (AlQudra), is being more circumspect with his comments on any upcoming IPOs.
Fardan Hassan Al Fardan, Board Chairman of Al Rayan Investments, said Al Rayan will turn into a joint stock company to attract new capital and broaden its base of shareholders to execute recently announced projects. The company will use a mix of sukuks and bonds to finance projects worth up to Dh6 billion, he said.
Al Fardan, who occupies important positions in Sorouh and Al Qudra, said the efforts made by Abu Dhabi to privatise and attract foreign investment have begun to show results.
What are the reasons for turning into a public joint stock company? And when will Al Rayan offer its shares?
They are the same reasons that push other companies – most importantly to attract more capital and broaden the base of shareholders to serve the company's aims of business and project expansion. Our company intends to enter into important and big investment projects in the near future, and this requires the provision of finance from all available sources.
As for the timing of the share offer, it will be announced later.
Five big real estate firms in Abu Dhabi have announced they will turn into public joint stock companies this year. Do you think the market needs these companies and can accommodate them? And what effect will these companies have on Abu Dhabi's economy, especially the liquidity in the market?
Al Rayan is a company with several investments in various fields, and real estate has the biggest share. Al Rayan's investment covers industry, environment-friendly building materials, alternative education, health services, military services and finance. I believe the economic situation in the UAE, particular in Abu Dhabi, is conducive for all these companies to successfully launch IPOs.
Also, the leap in the real estate market seen in the country is a result of carefully planned policies, where risk is at the lowest level. As for excess liquidity, there are no real risks as both the market movement and supply and demand for real estate is a basic element in the transformation of the companies into public joint stock ones.
What projects are you currently developing? And do you expect delays in their handover given that several developers have reported delays with their projects?
We have the Apex, which has two towers – a hotel and studios; the Moon Flower residential project in Dana, Abu Dhabi; a labour housing project in Al Musaffah accommodating 25,000 workers; the building worker residential city in Al Mafraq for some 32,000 workers; and the Al Rayan youth village – a low-income housing project.
When will you start constructing the low-cost housing city?
The project is still under study. The date of construction will be announced when some necessary procedures are complete.
How will you finance your projects?
We have many choices and we might combine sukuks with bonds. We will make an announcement at a suitable time about the direction we will take in terms of finance.
What is your total projected investment in the next few years?
The total value of the company's investments by 2010 will be around Dh6 billion.
What is you evaluation of the real estate sector in Abu Dhabi?
The real estate sector in Abu Dhabi is characterised by integral planning and is in line with the wise policies of our leadership.
Most new projects in Abu Dhabi involve luxury residences. Real estate sector experts fear this kind of residence will be hit by a recession during the next few years. What is your view of that?
Luxury residency projects will not solve the problem of a shortage of residential units in Abu Dhabi. The real estate market is in an urgent need of residences for middle-income workers – the biggest category in our society. The kind of projects launched by some developers such as Manazel and Hydra do not meet this demand. There should be other projects for middle-income people. I firmly believe that companies developing luxury residences will not face any kind of recession, at least not during the next 10 years. These projects are not constructed only for the rich – many of them are suitable for the middle-income category.
PROFILE: Fardan Hasan Al Fardan, Chairman, Al Rayan Investments
Fardan Hasan Al Fardan belongs to a family of prominent businessmen. He has been a member of the Abu Dhabi Investment Authority for 24 years. Al Fardan is a member of the Abu Dhabi Chamber of Commerce and Industry and holds many positions in different business sectors.
He is also a board member of Sorouh and Deputy Chairman of Al Qudra Holding.
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