Drake and Scull looking to raise $272mn in IPO

FUNDING EXPANSION: Drake and Scull are looking to raise $272 million through listing 55% of the company on the DFM. (Getty Images)

Dubai-based contracting firm Drake and Scull said on Monday it aims to raise 1 billion dirhams ($272.3 million) in an initial public offering (IPO) this month and list the stock on the Dubai Financial Market (DFM) by October.

Owners of the company plan to sell a 55% stake, a company spokeswoman said, declining to identify the owners or give further details about the planned IPO.

HSBC Holdings and Dubai-based Al Mal Capital are advising on the sale.

Last month, Lebanon's Makhzoumi family dropped plans to raise as much to $554 million in an IPO of its Dubai-based Future Pipe Industries (FPI), dealing another blow to the emirate's international standards exchange, the Dubai International Financial Exchange (DIFX).

Unlike the local DFM, the DIFX operates according to international financial reporting and accounting standards, where IPOs are generally priced on a book-building basis rather than set by the Ministry of Economy.

The Makhzoumis had planned to sell up to 35% of FPI, which makes wide-diameter fibre-glass pipes.

The month before Dubai-based interiors contractor Depa raised $432 million in an IPO to finance acquisitions and organic expansion, listing the stock on the DIFX and in London.

Drake and Scull said last month it has about $327 million in district cooling contracts underway and expects to double the capacity it was building by the middle of next year.

The firm has been riding a construction boom in the Gulf Arab region, fuelled by a near seven-fold rise in oil prices in six years.

District cooling distributes chilled water generated in a centralised location for buildings and is considered cheaper than using electricity to run individual compressors for cooling. (Reuters)

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