The Abu Dhabi developer Eshraq may become the first UAE company in nearly two years to test the market with an initial public offering (IPO).
Eshraq is reportedly planning to offer up to 55 per cent of the company in public shares as early as next month, a source familiar with the deal confirmed.
Any IPO in the UAE is likely to face sceptical investors, analysts say. The telecommunications retailer Axiom cancelled an announced offering last month, citing "market conditions and liquidity" concerns.
Chet Riley, an analyst with Nomura Securities. said: "In this market, for a UAE company without a strong prospectus and a growth story, it is going to be quite difficult. It will be pretty tough in this market to get away with a property IPO."
Eshraq lists three projects in the early stages of development: Marina Rise, a cluster of residential and office towers on Reem Island, first announced in 2007; a mixed-use project called Gateway between Al Maqta and Zayed bridges in Abu Dhabi; and Jumeirah Rise in Dubai.
Company executives did not return calls seeking comment.
Analysts feel investors will be wary of a property company without completed projects and established revenue. "Any IPO related to real estate would have to be offered at a significant discount" to the book value of the company, said Majed Azzam, an analyst with Alembic HC Securities.
The failed Axiom offering illustrated that it is "still early for UAE companies to go public", Mr Azzam said. "There is still a lot of uncertainty here."
Property was the "least preferred sector" among investors, he said. The established Abu Dhabi property companies Aldar and Sorouh Real Estate have been struggling recently. Aldar, the capital's largest developer, posted a Dh731 million (US$199m) loss in the third quarter last year and is working to restructure more than Dh10 billion of debt.
Public markets around the world have shown little interest in property stocks in the past year. In September, Emaar MGF, the Indian branch of the Dubai property company Emaar, put an announced IPO on hold.
Amer Group Holding, an Egyptian property company, raised $200m through an IPO in November, the most recent attempt by a regional property company to raise funds through a public offering. The stock was trading at 2.84 Egyptian pounds yesterday, compared with a high of 2.89 pounds on November 30, after its launch.
"Egypt is a different story," Mr Azzam said. "The demand story [in Egypt] is very clear." Eshraq executives have publicly discussed a possible IPO since 2009. Sulaiman Mohammed al Dhalaan, its general manager, said during a Cityscape conference in 2009 that the company has a "strong desire" to become a public joint stock company.
"We were about to do it last year and almost finalised the shift procedures, but circumstances of the global financial crisis affected us. Now circumstances are improving, and we might shift into a public joint stock company next year," Mr al Dhalaan said at the time.
Saleh bin Nasrah, the company's chairman, said in an interview with the Arabic newspaper Al Bayan this week that Eshraq planned to offer 820 million shares and that the National Bank of Abu Dhabi (NBAD) would lead the offering.
NBAD officials declined to comment. "We don't have any comment until the Emirates Securities and Commodities Authority has given final approval for the timing for an IPO," a spokesman at NBAD said.
kbrass@thenational.ae
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
COMPANY%20PROFILE
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Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
SPECS
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The%20specs%3A%202024%20Mercedes%20E200
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The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
Company%20Profile
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COMPANY%20PROFILE%20
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Tori Amos
Native Invader
Decca
Company%20Profile
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UAE Tour 2020
Stage 1: The Pointe Palm Jumeirah - Dubai Silicon Oasis, 148km
Stage 2: Hatta - Hatta Dam, 168km
Stage 3: Al Qudra Cycle Track - Jebel Hafeet, 184km
Stage 4: Zabeel Park - Dubai City Walk, 173km
Stage 5: Al Ain - Jebel Hafeet, 162km
Stage 6: Al Ruwais - Al Mirfa, 158km
Stage 7: Al Maryah Island - Abu Dhabi Breakwater, 127km
Results
Stage seven
1. Tadej Pogacar (SLO) UAE Team Emirates, in 3:20:24
2. Adam Yates (GBR) Ineos Grenadiers, at 1s
3. Pello Bilbao (ESP) Bahrain-Victorious, at 5s
General Classification
1. Tadej Pogacar (SLO) UAE Team Emirates, in 25:38:16
2. Adam Yates (GBR) Ineos Grenadiers, at 22s
3. Pello Bilbao (ESP) Bahrain-Victorious, at 48s
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
COMPANY%20PROFILE
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SPECS
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The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
SPECS%3A%20Polestar%203
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Company%20profile
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Meydan race card
6pm Dubai Trophy – Conditions(TB) $100,000 (Turf) 1,200m
6.35Dubai Trophy – Conditions(TB) $100,000 (Turf) 1,200m
1,800m
7.10pm Jumeirah Derby Trial – Conditions (TB) $60,000 (T)
1,800m ,400m
7.45pm Al Rashidiya – Group 2 (TB) $180,000 (T) 1,800m
8.20pm Al Fahidi Fort – Group 2 (TB) $180,000 (T) 1,400m
8.55pm Dubawi Stakes – Group 3 (TB) $150,000 (D) 1,200m
9.30pm Aliyah – Rated Conditions (TB) $80,000 (D) 2,000m
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million