The Dubai District Cooling Company will license 10% of the shares in the offering

(Bloomberg) – Dubai plans to sell a 10% stake in Emirates Central Cooling Systems, the city’s fourth privatization this year, as part of a push to increase share trading.

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Dubai Electricity and Water Authority and Emirates Energy Investment will offer 1 billion shares in an initial public offering, according to an announcement in Gulf News. The district cooling company, known as Empower, will begin accepting investor requests for an initial public offering from October 31, with a price set for November 9.

Empower’s IPO is part of the government’s privatization drive to increase liquidity and attract a flurry of share sales in neighboring Abu Dhabi and Saudi Arabia. The three Dubai lists this year, including the Dubai Electricity Company, together raised about $ 7.6 billion.

Rising oil prices and an influx of investors have led to an emissions boom across the energy-rich Persian Gulf, as companies have encountered enormous levels of demand at a time when prices have stalled in most other markets. The Middle East is heading towards its second best year after 2019, which saw a record $ 29.4 billion issuance by Saudi oil giant Aramco.

However, previous gains in regional equities have faltered and oil prices have fallen 30% from their June peak on fears that sharp hikes in interest rates could push the global economy into recession and reduce energy demand.

Dubai’s benchmark index has dropped nearly 5% since the government began delaying its IPO by listing the $ 6.1 billion Dubai Electricity Company in April. The power company’s share price fell from the offer price for the first time last week.

Founded nearly two decades ago, Empower is 70% owned by Dubai Electricity Company. The company said it expects the minimum annual dividend to remain at 850 million dirhams ($ 231 million) per year for two years after the initial public offering.

Emirates NBD Capital and EFG Hermes are joint managers of the offering.

Saeed has authorized to borrow $ 1.5 billion to finance dividends prior to the IPO
Empower expects a minimum dividend of AED 850 million / year after the IPO
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