Introducing 1.5 billion shares of Salik on the Dubai Financial Market
Salik, the exclusive operator of toll gates in Dubai, announced today its intention to proceed with an initial public offering (the “Initial Public Offering” or “Offering”) and listing its ordinary shares (the “Shares”) for trading on the Dubai Financial Market.
The most important details of the offering process
● Availability of one billion five hundred million (1,500,000,000) shares with a nominal value of 0.01 dirhams per share during the subscription process, which represents 20% of the total shares issued in the capital of Salik.
● The offering process consists of individual subscribers (first tranche), professional investors (second tranche) and qualified employees (third tranche).
● The subscription period begins on September 13, 2022 and is expected to end on September 20, 2022 for retail investors in the UAE, and on September 21, 2022 for qualified investors.
● The Government of Dubai, represented by the Department of Finance ("Seller Shareholder"), reserves the right to amend the size of the offering at any time before the end of the subscription period at its absolute discretion and based on the applicable laws and after approval by the Securities and Commodities Authority.
● The Internal Shari'a Supervisory Committee of Emirates NBD Bank PJSC issued
A legal statement confirming, from her point of view, the compatibility of the proposal with the provisions of Islamic Sharia.
However, investors must take the necessary due diligence measures to ensure that the offering is in compliance with Islamic Sharia law to achieve their own ends.
● The listing acceptance process is expected to be completed in September 2022
Capital Structure and Dividend Policy
● The company's capital as on the date of listing was determined at 75,000,000 dirhams, divided into 7,500,000,000 fully paid shares, and the value of each share is 0.01 dirhams
● After completing the offering, the company intends to distribute dividends twice in each fiscal year after the offering in April and October of each year
● The company expects to distribute the first profits for the second half of 2022 by April 2023, and the company expects to distribute 100% of the net profit, after maintaining the legal reserve required by law (the legal reserve is expected to reach 37.5 million UAE dirhams before distributing the first dividends)
● From 2023 onwards, the company expects to pay 100% of the distributable net profit as dividend.
● The dividend policy is subject to several considerations that are considered by the Board of Directors, taking into account the cash management requirements of the company's business in relation to operating expenses, financing costs, expected capital expenditures and investments.
● In addition, the Company expects the Board of Directors to also consider market conditions, the operating environment in the Company's markets, and the Board's expectations of the Company's business and growth opportunities.
His Excellency Mattar Al Tayer, Chairman of the Board of Directors of Salik, said: "Thanks to the wise leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, may God protect him, Dubai has succeeded in establishing a clear economic path over several years. It drew an ambitious plan for the coming decades that includes attracting direct strategic investments.
He added: Last June, His Highness Sheikh Mohammed bin Rashid Al Maktoum issued Law No. (12) of 2022, establishing "Salik" as a public joint stock company to operate the system of traffic toll gates, and the announcement of the company's shares today is a continuation of the privatization program pursued by the Emirate of Dubai And its plans to double the size of its financial market to 3 trillion dirhams and attract foreign investments, noting that Salik is one of the leading brands that has played a pivotal role in managing traffic in Dubai for 15 years, and its role will remain at the heart of expansion plans in the road and transport sector. In order to support the emirate's economy."
The Chairman stated that the company is well positioned to take advantage of additional growth opportunities to ensure efficient operations, an effective regulatory framework that supports future growth, and a business model that requires low capital expenditures and best-in-class cash transfer margins.
His Excellency Mattar Al Tayer stressed that the infrastructure of the roads and transportation network in the Emirate of Dubai, which is supported by an advanced technical system, is one of the best infrastructures in the world, and the road network has maintained the first position in the world in road quality for several years.
Ibrahim Sultan Al Haddad, CEO of Salik, said: “As the exclusive operator of toll gates in Dubai, Salik represents a unique brand in every sense of the word, and provides investors with a unique opportunity to be part of Dubai’s ambitious vision by investing in An asset of high quality infrastructure.The company's customized technology undoubtedly supports the seamless movement of residents and tourists between many of Dubai's iconic landmarks at affordable prices.
He added: The initial public offering represents an important milestone in Salik's journey, as it provides an opportunity to consolidate its success as an exclusive operator of traffic toll gates in Dubai, and it currently operates eight gates distributed in strategic locations across Dubai's busiest corridors, and the company's work is based on long-term principles, values and culture. It revolves around customers, the environment, and investment in human capital and modern technologies.
At the community level, Salik provides exemptions and subsidies for vehicles of people of determination, public transportation, and school buses. Salik’s focus extends to people, to include improving the customer experience and developing human capital with a focus on the values of equality and inclusion.
Offering process details
The Government of Dubai, represented by the Department of Finance, expects to sell 20% of the total issued capital of Salik (equivalent to a total of 1,500,000,000 shares of the company) with the selling shareholder retaining the right to amend the size of the offering at any time before the end of the subscription period at its absolute discretion and based on Applicable laws and after approval of the Securities and Commodities Authority.
The offering consists of:
● Public Offering (Issuing individual investors in the UAE)
o to individuals and other investors in the United Arab Emirates (as defined in the prospectus in the United Arab Emirates and referred to as “first tranche” subscribers); and
o Certain Eligible Employees (“Eligible Employees”) (as defined in the prospectus in the United Arab Emirates and referred to as “Third Tranche” subscribers).
● An offering to professional and other investors in a number of countries outside the United States of America, including the United Arab Emirates, in accordance with Regulation “S” (RegS) of the US Securities Act (“Qualified Investors Offering” referred to as “Tranche Two” subscribers) .
Furthermore, as part of the Qualified Investor Offering, and in accordance with both the Companies Law and Dubai Law:
● 5% of the Offer Shares will be reserved for the Emirates Investment Authority ("the Authority").
● 5% of the Offer Shares will be reserved for the Local Military Pension and Social Security Fund (the “Fund”).
The subscription period for individuals in the UAE is expected to extend from 13 to 20 September 2022, while the subscription period for qualified investors is expected to extend from 13 to 21 September 2022.
The offering price per share (the “Offering Price”) will be determined during and after the process of building the subscription order book.
Participants in the offering of individual investors in the UAE will subscribe at the offer price.
The offering and acceptance of listing is currently expected to be completed in September 2022, based on market conditions and after obtaining relevant regulatory approvals in the UAE, including approval for listing and trading on the Dubai Financial Market.
Under a subscription guarantee agreement entered into prior to the date of listing (“Subscription Guarantee Agreement”) between the Company, the selling shareholder and the joint subscription registry managers, the shares held by the selling shareholder are subject to a ban period starting from the date of the subscription guarantee agreement and ending 180 calendar days after the date of listing inclusive (the “period of Ban”), except for the permitted concessions as stated in the prospectus.
The company will also be subject to a ban period, according to the prospectus.
Details of the offering for individual subscribers will be published in an Arabic language prospectus ("IPO") and in an announcement of the public offering ("IPO Announcement") in the United Arab Emirates.
As for qualified investors, details will be published in an international offering memorandum in English.
The prospectus and announcement of the IPO will be published in the UAE today, while the international offering memorandum is expected to be published in due course.
The international offering memorandum and the UAE prospectus will be available at http://ipo.salik.ae/.
"Mollis & Company" UK LLP Branch (DIFC) has been appointed as an independent financial advisor and "Emirates NBD Capital PJSC" as the financial advisor to "SALIC".
Emirates NBD Capital PJSC, Goldman Sachs and Merrill Lynch International have been appointed as Joint Global Coordinators and Joint Bookrunners for the Offering.
Citigroup Global Markets Limited, EFG Hermes Emirates Limited (together with EFG Hermes Emirates LLC), and HSBC Bank Middle East Limited have been appointed as joint bookrunners for the book.
“Emirates NBD Bank PJSC” is designated as the main receiving bank, and Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Ajman Bank, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates Islamic Bank, First Abu Dhabi Bank, Mashreq Bank, Local Al Maryah, Sharjah Islamic Bank are also receiving banks.
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