Sharjah-based budget airline Air Arabia will close its AED2.5bn (US$681m) IPO on Tuesday. Billed as the largest IPO in UAE history, the offering comprised of 2,566,700,000 shares worth 1AED each, making up 55% of the company’s share capital value. The proceeds of the offering, that has reportedly recieved strong demand from the retail sector, will be used to expand the airline’s fleet from nine to at least 34 aircraft by 2016. In addition, Air Arabia aims to expand its scope of operations and invest in the infrastructure to handle the fleet expansion.
Rody Yared, senior vice president syndicate at Shuaa Capital – the lead manager, financial advisor and bookrunner for the IPO – said: “From the start of the subscription period, the issue has witnessed considerable demand across the retail investor segment. Additionally, Air Arabia’s IPO has been very attractive to institutional investors both locally and internationally.”
Yared added that the impressive subscription levels proved that the appetite for solid IPO transactions had not been dampened by the performance of the regional financial markets.
Allocation of shares among subscribers will take place on April 8, 2007, with refunds for subscribers in the UAE on April 11
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and for those in the GCC on April 14
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.
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