The subscription is on September 13, with a total of 1.5 billion shares. The company's valuation is 18.3 billion dirhams

Salik intends to offer 20% of its shares on the Dubai Financial Market

Salik is one of the leading brands that played a pivotal role in traffic management in Dubai.

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Salik, the exclusive operator of toll gates in Dubai, announced yesterday its intention to proceed with an initial public offering and to list its ordinary shares ("shares") for trading on the Dubai Financial Market.

The company revealed, during a press conference yesterday, that it will provide 1.5 billion 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 (the first tranche), professional investors (the second tranche), and qualified employees (the third tranche). The subscription period will start on September 13, 2022, and is expected to end on September 20, for individual investors in the UAE and on September 21 this year. to qualified investors.

The Government of Dubai, represented by the Department of Finance (the selling shareholder), reserves the right to modify the size of the offering at any time before the end of the subscription period, at its absolute discretion, based on the applicable laws, and after approval by the Securities and Commodities Authority.

The Internal Shari'a Supervisory Committee of Emirates NBD issued a Shari'a statement confirming, from its point of view, the compatibility of the offering with the provisions of Islamic Shari'a.

The company's capital as on the date of listing was set at 75 million dirhams, divided into 7.5 billion fully paid shares, and the value of each share is 0.01 dirhams.

2021 earnings

Salik's profits in 2021 amounted to about 1.38 billion dirhams, compared to 1.1 billion dirhams in 2020, a growth of 25%, according to the company's prospectus.

The bulletin indicated that Salik achieved profits in 2019 by about 1.65 billion dirhams, i.e. in the period preceding the “Covid-19” pandemic.

The company's total revenue in 2021 amounted to about 1.69 billion dirhams, compared to 1.39 billion dirhams in 2020, and 1.97 billion dirhams in 2019. During the period between January 1 and July 1, 2022, the company achieved profits of about 796.7 million dirhams, compared to 634. 4 million dirhams in the corresponding period of 2021. Revenues amounted to 945 million dirhams in the first half of 2022, compared to 793 million dirhams, compared to the corresponding period of 2021.

Reuters and Bloomberg sources expected that Salik would raise up to one billion dollars (3.67 billion dirhams) from offering 20% ​​of the company to the public offering, which means the company's valuation at five billion dollars (18.35 billion dirhams).

distribute profits

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, and the company expects to distribute the first dividends for the second half of 2022 by April 2023, and the company expects to distribute 100% of the net profit, after keeping The legal reserve required by law, and it is expected that the legal reserve will reach the amount of 37.5 million dirhams, before the distribution of the first profits.

From 2023 onwards, the Company expects to pay 100% of the net profit distributable as dividend. The dividend policy is subject to several considerations considered by the Board of Directors in consideration of the cash management requirements of the Company’s business in relation to operating expenses, financing costs, projected 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.

clear path

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, Dubai has succeeded in establishing a clear-cut economic path over several years, and has drawn up an ambitious plan. For the coming decades, it includes attracting direct strategic investments.

He added: "During the month of 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. The Emirate of Dubai is pursuing it and its plans to double the size of its financial market to three trillion dirhams and to attract foreign investments.” Expansion of the road and transport sector to support the emirate’s economy.

Al Tayer explained 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.

He stressed that "the infrastructure of the road and transportation network in the Emirate of Dubai, which is supported by an advanced technical system, is one of the best infrastructure in the world, and the road network has maintained the first position in the world in road quality for several years."

EXCLUSIVE PLAYER

For his part, CEO of Salik, Ibrahim Sultan Al Haddad, said: “As the exclusive operator of toll gates in Dubai, Salik represents a unique brand in every sense of the word, providing investors with a unique opportunity to be part of Dubai's ambitious vision through investment. In the asset of high quality infrastructure.

There is no doubt that the customized technology provided by the company supports the smooth movement of residents and tourists between many of Dubai’s distinctive 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 toll gates in Dubai, and it currently operates eight gates distributed in strategic locations across the busiest corridors of Dubai, and the company’s work is based on long-standing principles, values ​​and culture. The term 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.

capital

The Dubai government, represented by the Department of Finance, expects to sell 20% of the total issued capital of Salik, with the selling shareholder retaining the right to modify 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 the approval of the Securities Commission Finance and commodities.

Moreover, as part of the offering of qualified investors, and in accordance with both the Companies Law and Dubai Law, 5% of the shares of the offering will be reserved for the Emirates Investment Authority “the Authority,” and 5% of the shares of the offering will be reserved for the Pension and Social Security Fund for the local military “the Fund”.

The offering and acceptance of listing is currently expected to be completed in September, 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 concluded before 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 after 180 calendar days from the date of listing implicitly (ban period), Except for the permissible concessions according to what was mentioned in the prospectus, the company will also be subject to a ban period according to what was mentioned in the prospectus.

• Dubai Government reserves the right to amend the offering size at any time before the end of the subscription period.

• It is currently expected to complete the offering and acceptance of listing in September.

• 1.38 billion dirhams, profits of the "Salik" company in 2021.

Appointment of consultants

Mollis & Company UK LLP, DIFC subsidiary, has been appointed as an independent financial advisor, and Emirates NBD Capital as a financial advisor to Salik.

Emirates NBD Capital, Goldman Sachs and Merrill Lynch International have been appointed as joint global coordinators and joint bookrunners.

Citigroup Global Markets Limited, EFG Hermes Emirates Limited, EFG Hermes Emirates LLC and HSBC Bank Middle East Limited have been appointed as joint bookrunners.

Emirates NBD was appointed 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, Al Maryah Local Bank, Sharjah Islamic;

As receiving banks, too.

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