Dubai plans $689 mln IPO as it steps up tourism push
Dubai Parks and Resorts want to build a $2.9 billion amusement park complex
A Dubai company plans to launch a $689 million initial public offer of shares this month as it builds a $2.9 billion amusement park complex which is key to the emirate’s drive to expand as an international tourist destination.
Dubai Parks and Resorts, part of the government-owned Meraas investment group, said on Tuesday it would sell 2.53 billion shares or 40 percent of its outstanding shares between Nov. 17 and Nov. 30, at a price of 1 dirham each.
The company has started work on three linked theme parks that it says will help Dubai meet its target to double annual tourist numbers to 20 million in 2020 from 10 million in 2012, and treble tourism income over that period.
The 16 million square foot (1.5 million square meter) project on the outskirts of Dubai is to feature three theme parks: Motiongate, based on films made by DreamWorks Animation and Sony Pictures, LEGOLAND Dubai, and Bollywood Parks.
Hotel, shopping and other entertainment facilities are also planned, with completion scheduled by Sept. 30, 2016.
Meraas estimates the project will cost a total of about 10.5 billion dirhams, funded through 4.2 billion dirhams of debt arranged by Goldman Sachs, and 6.3 billion dirhams of equity.
The equity will include the IPO proceeds, plus 2 billion dirhams in cash and 1.78 billion dirhams in land and previous expenses funded by Meraas.
The Dubai Parks IPO marks a revival of equity offers in the United Arab Emirates; they dried up as the global financial crisis erupted five years ago, but are now being buoyed by a strong rebound in the UAE economy and markets. Several offers have occurred this year and drawn heavy investor demand, including the $1.6 billion IPO of Emaar Malls Group.
Emirates Financial Services, Goldman Sachs and HSBC are acting as joint global coordinators for the Dubai Parks IPO, with EFG Hermes and Shuaa Capital also involved.
Ten percent of the offer will be allocated to retail investors, 25 percent to wealthy individuals wishing to buy a minimum of 5 million shares each, and 60 percent to institutions ordering at least 10 million shares. The remaining 5 percent is reserved for the UAE government’s Emirates Investment Authority.