Dubai district cooling firm Empower to sell ten percent stake in IPO

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Dubai plans to sell a ten percent stake in Emirates Central Cooling Systems Corp., the city’s fourth privatization this year as part of a drive to boost trading volumes on the stock exchange.

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Dubai Electricity and Water Authority and Emirates Power Investment will offer one billion shares in an initial public offering, according to an advertisement in Gulf News.

The district cooling firm, known as Empower, will start taking investor orders for the IPO from October 31, with pricing scheduled for November 9.

Empower’s IPO is part of the government’s privatization drive to increase liquidity and catch up with a flurry of share sales in neighboring Abu Dhabi and Saudi Arabia. Dubai’s three listings this year, including that of Dubai Electricity, have raised about $7.6 billion combined.

High oil prices and investor inflows have driven a IPO boom across the energy-rich Gulf, with firms finding overwhelming levels of demand at a time when listings have shuddered to a halt in most other markets.

The Middle East is headed for its second-best year after 2019, which saw the record $29.4 billion IPO of Saudi oil giant Aramco.

An earlier rally in regional equities has faltered, however, and oil prices have tumbled 30 percent from a high in June on concerns aggressive interest rate rises could tip the global economy into recession and crimp energy demand.

Dubai’s benchmark index is down about five percent since the government kick-started its IPO push with Dubai Electricity’s $6.1 billion listing in April. Shares in the utility dropped below their offer price for the first time last week.

Empower, established almost two decades ago, is 70 percent owned by Dubai Electricity. The firm has said it expects the minimum annual dividend to remain at 850 million dirhams ($231 million) annually for two years after the IPO.

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