Dubai has issued an order establishing the toll-service provider Salik as a public joint stock company (PJSC), Emirates News Agency (WAM) reported on Wednesday, signaling strong potential for an IPO.
According to the law, the company's shares are owned by the Dubai government. These shares can be offered by subscription in a public offering or through private placement, WAM reported.
However, the government would continue to hold 60 percent of the company’s capital.
“The company will have legal, financial and administrative autonomy to carry out its activities and achieve its objectives, in accordance with the provisions of the new law, the company’s articles of association and other relevant Dubai legislation,” WAM reported.
The newly established Salik Company PJSC will receive the proceeds from the toll gates, including fees and fines, WAM reported. It also gives the executive council of Dubai the capacity to add, remove and modify existing toll gates in consultation with the country’s Road and Transportation Authority (RTA).
The announcement did not specify if or when the shares will be made available through an IPO.
The company formation comes at a time when the Middle East is enjoying an unprecedented listings boom fueled by high oil prices, equity inflows, and regional governments' drive to list state-owned assets.
IPOs in the region have raised $13.4 billion in the first five months of the year, already eclipsing the amount raised in any other first half, data compiled by Bloomberg show.
Dubai, which missed out entirely on a flurry of share sales in neighboring Abu Dhabi and Saudi Arabia last year, unveiled a plan in November to list 10 state firms in a bid to revive trading volumes and boost liquidity.
The first of those privatizations was the $6.1 billion IPO of the city’s main utility, Dubai Electricity & Water Authority, in April. That listing was the world’s second-biggest this year and drew overwhelming demand from both regional and international investors.
While DEWA surged 20 percent on its first day of trading, it has since given up many of those gains and is now trading about three percent above its IPO price. Volumes have also dwindled from the first week.