Majid Al Futtaim IPO 'not on the table', despite strong sukuk demand, says CEO

The Dubai-based ratailer's green sukuk was a first for the region and was six times oversubscribed
Majid Al Futtaim IPO 'not on the table', despite strong sukuk demand, says CEO
The market-opening bell ringing ceremony to mark the listing of Majid Al Futtaim’s $600 million green sukuk bond, a first for the region and a new corporate benchmark for the sector.
By Shane McGinley
Wed 15 May 2019 12:53 PM

Dubai-based retail giant Majid Al Futtaim has ruled out a possible listing for the company, despite its recently launched green sukuk being six times oversubscribed and two thirds of investors coming from outside the region, the CEO told reporters on Wednesday.

“We love listing our financial instruments and will continue to do that. Listing, in terms of IPO for the company, that is a different point and this is not on the table,” Alain Bejjani, CEO of Majid Al Futtaim Holding, said in response to a question from Arabian Business during a media roundtable at Nasdaq Dubai’s offices.

The comments came following the market-opening bell ringing ceremony to mark the listing of Majid Al Futtaim’s $600 million green sukuk bond, a first for the region and a new corporate benchmark for the sector.

“[The green sukuk] is a first for the region. It is something we will be doing more of at the right time and in the right circumstances,” Bejjani said.

The CEO’s focus on listing financial instruments, rather than a full IPO for the company, comes as the retail conglomerate witnessed strong demand for its Islamic bond.

“We are also very encouraged by the level of interest we have seen, we were oversubscribed almost six times…. When you look at the widespread geographical spread we see that we have almost one third from the region…. we have almost a third coming from Asia and another third from the rest of the world between the UK, Europe…. That is very interesting for a company that is based here in Dubai. It is a testimony to Dubai and the UAE,” Bejjani added.

The proceeds from the latest sukuk will be used to fund environmentally-friendly projects in sectors such as green real estate, renewable energy, sustainable water management and social impact initiatives.

In January, the retail conglomerate reported that revenue in 2018 rose 8 percent to reach AED34.6 billion ($9.42 billion), resulting in a 9 percent rise in EBITDA (earnings before interest, tax, depreciation and amortization) to AED4.6 billion over the same period.

“2018 has been a year of growth for our company, despite the macroeconomic challenges that affected consumer sentiment. Our strategy to diversify our offering and geographical presence, as well as our commitment to customer centricity and technology investments has yielded great results,” Bejjani said of the end of year results.

The company last year celebrated the opening of two new shopping malls in the UAE and Oman, grew its hotel portfolio to 13 assets and added 33 grocery retail stores, growing its portfolio to 264.

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