Insurance firm IPO to test battered UAE market

Finance House plans to raise $18m from IPO planned for next month, say bankers
Insurance firm IPO to test battered UAE market
TOUGH TEST: UAE markets have not seen an IPO in about two years as the global economic downturn and Dubais debt crisis dented investors’ appetite (Getty Images)
By Reuters
Wed 26 Jan 2011 07:33 PM

Abu Dhabi-based Insurance House is planning a small initial public offering (IPO) in February, banking sources said, the latest company to test investor demand after a drought of stock market listings.

UAE markets have not seen an IPO in about two years as the global economic downturn and Dubai's debt crisis dented investors’ appetite.

Insurance House, a unit of Abu Dhabi-listed Finance House, is planning to raise $18m by listing on the Abu Dhabi Securities Exchange (ADX), the sources said.

Another Abu Dhabi-based firm Eshraq Properties is also planning an IPO in February, Reuters reported earlier this month. Eshraq plans to sell a 55 percent stake worth an estimated $224m in the IPO and list on the Abu Dhabi stock exchange.

“Approval has been secured from the Emirates Securities Authority and the [Insurance House] IPO will be launched on Feb 16 for 14 days,” an Abu Dhabi-based banker who did not want to be identified told Reuters on Wednesday.

The founders will retain 45 percent of the company’s shares, offering 55 percent to the public, said the banker. The company’s share capital is $32.68m.

UAE handset retailer Axiom Telecom cancelled its IPO in December, citing “market conditions and liquidity” concerns. Axiom had hoped to debut on NASDAQ Dubai in early December with a market value of up to $1bn.

National Bank of Abu Dhabi and Finance House are acting as the lead receiving banks for Insurance House’s IPO along with Mashreq Bank. Finance House officials declined to comment on the IPO plans.

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