Dubai’s toll-gate operator, Salik has planned to sell 1.5 billion shares, 20 percent of the equity capital, through an initial public offering (IPO).
Salik, which was converted into a public joint stock company in June, operates 8 toll gates in Dubai and follows Dubai Electricity and Water Authority (DEWA) and Tecom Group in heading toward a listing on Dubai Financial Market (DFM).
According to reports, the company is seeking to raise around $1 billion for the shares, implying a valuation of $5 billion. Salik expects to generate significant growth in revenues as more vehicles pass through its toll gates. As of the end of April, it had 3.6 million registered vehicles, of which 1.8 million were vehicles registered in Dubai. More toll gates could be set up in the city, subject to approval from Road and Transport Authority (RTA).
Dubai launched its Salik electronic toll collection system in 2007 to ease congestion in the regional trading hub, which at the end of April had 3.6 million registered vehicles, of which 1.8 million were vehicles registered in Dubai.
The listing follows Dubai’s plans to list 10 state-owned companies, as announced by Dubai’s deputy ruler, Sheikh Maktoum Bin Mohammed in November, to increase the size of its financial market to about $817 billion, as well as set up a $544 million market maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.
Its IPO has three tranches, one offered to individuals, the second offered to professional investors and the third to employees. 5 percent of the shares will be allocated to the Emirates Investment Authority (EIA), a federal sovereign wealth fund.