Dubai’s Daman Investments working on IPO

Daman had said in mid-March that it was in the final stages of obtaining regulatory approval

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Dubai’s Daman Investments, a United Arab Emirates investment management firm, is working on plans to go public, its chairman said on Thursday, although sluggish equity markets have caused other UAE companies to suspend such moves.

Daman had said in mid-March that it was in the final stages of obtaining regulatory approval and hoped to launch an initial public offer in the next few weeks.

After reviving last year, however, the UAE’s IPO market has become inactive again this year, as a slowdown in the real estate market and lower oil prices have weighed on stock prices and trading activity.

“We are actively working on our IPO plans,” the chairman and founder of Daman Investments, Shehab Gargash, said in a statement emailed to Reuters. “We confirm our intention to float remains unchanged and we shall in due course announce a definitive date of our offering.”

Gargash said Daman was assessing a new UAE companies law introduced in April, the summer holiday season and the Muslim holy month of Ramadan, which began on June 18, as factors in its decision. He did not elaborate.

Stock trading turnover in the UAE tends to slow during the hot summer and Ramadan, when many individual investors step back from the market.

The new companies law reduced the minimum “free float” of shares in listings on the UAE’s two main stock markets to 30 percent from 55 percent, aiming to encourage company owners to go public. It also allowed IPO prices to be set by book-building - or obtaining indicative bids from fund managers - rather than through a fixed-price evaluation method.

Daman said last November that it would sell new shares equivalent to 55 percent of the firm to the public. The introduction of the new companies law means it could now theoretically sell a smaller stake.

Founded in 1998, Daman is backed by investors from the UAE and the wider Gulf region. It sold a 22.7 percent stake to private investors via a placement of shares in June 2012, which valued the company at 440 million dirhams ($120 million).

Emirates Investment Bank was appointed financial adviser and lead manager for the IPO, with law firm White & Case acting as legal adviser, the firm said in November.