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Wed 12 Sep 2012 04:22 PM

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Dubai's Daman plans second round of funding

Dubai-based investment firm plans to sell 800,000 shares at US$74 per share

Dubai's Daman plans second round of funding
Daman Investments CEO Shehab Gargash.

Dubai-based Daman Investments, which increased its shareholder base in June, plans to launch a second round of funding, its CEO said.

The firm, which last month said it would delay selling its shares to the public until 2015, said the market is not ready for an IPO.

“We are going ahead with the second round of fund raising in which we are offering 800,000 shares,” Shehab Gargash told reporters Wednesday. The new shares are expected to sell for more than AED170 (US$74) per share.

He declined to offer a date on the sale, adding it would take place “in due course”.

“We don’t feel this market is yet ready for an IPO. The liquidity in the market in not enough for an active primary market,” he added.

In June, as part of its strategy to broaden its shareholder base, Daman sold a 22.7 percent stake through a private placement which values the company at AED440m (US$119.8m).

The total number of issued shares increased to 2,588,235 from 2,000,000. The new shares were issued at a premium of AED70 (70 percent) above their nominal value of AED100 per share.

Daman Investments, established in 1998, was initially planning to hold its IPO before the end of 2012 but in August said it would postpone it until 2015.

“I don’t think the market environment is conducive, liquidity is not there, the appetite is not there and investor sentiment is not there generally,” Gargash told Arabian Business.

“We are on track and are about to begin phase two of our capital raise which will be at a premium over phase one,” he said.

“Looking at our environment, where our end game of our capitalisation, which is an IPO, I venture it will be in 2015 or beyond.

“If it happens earlier it means that the market has gotten better and faster than we expected.”

Daman’s plan is for one third of the company to be publicly held, while the original investors retain a third and the rest is held by investors that came in between such as the recent private placement.

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