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Wed 5 Sep 2012 05:19 PM

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Dubai major Al Habtoor Group eyes IPO

Conglomerate in talks with DIFC and Nasdaq Dubai over plans to list shares on stock market

Dubai major Al Habtoor Group eyes IPO
Khalaf Al Habtoor, chairman of Dubai conglomerate Al Habtoor Group.

Dubai conglomerate Al Habtoor Group plans to list its shares on the stock market, its chairman has said.

The firm, one of the UAE’s largest family-owned businesses, met with senior executives from the Dubai International Financial Centre Authority and Nasdaq Dubai on Wednesday.

The Al Habtoor Group, a holding company for businesses ranging from construction, hospitality, automotive and real estate, did not give a timeframe for the listing.

“The Al Habtoor Group is considering an initial public offering (IPO) amid further strengthening the UAE’s prominent position in the capital markets and increased inflows from the euro zone,” it said in an emailed statement.

“The group already has a high level of corporate governance and its financial statements are prepared under IFRS and audited by an independent firm,” it added.

The number of regional family-owned companies looking to go public plunged in the wake of the economic downturn amid weak investor sentiment due to underperforming stock markets and risk aversion.

IPO activity is starting to show some signs of recovery amid renewed investor confidence and increasing share price levels across the Gulf. 

Regional capital markets in GCC raised a total of US$78m via two listings in the first quarter of 2012. Both initial public offerings were hosted on the Saudi Arabia's Tadawul, according to data from PwC.

Saudi Takween Advanced Industries raised US$62.38m, making it the largest IPO of the quarter, followed by Tokio Marine Saudi Arabia that raised US$16m.

Chairman Khalaf Al Habtoor in March told Arabian Business that he has been considering an IPO for over two decades.  “It is still [an option] but sometimes there are positive and negatives. I have been studying this IPO more than 25 years and I update and update, changing my mind,” he said.

“We will look at it but we will go IPO by increasing the capital. I mean if our capital is $1 for example, we want to increase it say $1.30. I want to sell the 30 cents but the $1 is mine… the 30 cents will avoid any funding [issues] in the future if we want to expand, buy properties or do something. But I want to have the control within my management,” he added.

The Al Habtoor Group is spending $1.3bn on a new hotel complex along Dubai’s Sheikh Zayed Road. The project includes three five-star hotels with more than 1,600 rooms, tennis courts, a garden, shops, restaurants and a theatre, is one of several hospitality projects.