Dubai Taxi Company Offers 25% Stake on Dubai Financial Market

A day after H H Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE issued Law No (21) of 2023 recognising Dubai Taxi Company as a public joint-stock company, the company announced on Monday its intention to proceed with an initial public offering (IPO) and list its ordinary shares to trade on the Dubai Financial Market (DFM).

Abdul Muhsen Ibrahim Kalbat, Chairman of Dubai Taxi Company said that benefitting from Dubai’s exceptional infrastructure and an ambition to double the size of its economy by 2033, supported by the Dubai Urban Master Plan 2040 which maps out a comprehensive plan for sustainable urban development in the emirate, his company remains key to the growth, mobility, and sustainability vision of Dubai, playing an integral role in moving and connecting the millions who call Dubai home and the rapidly increasing number of tourists who visit the UAE every year.

“Through this offering, Dubai Taxi Company is proud to support the continuation of the privatisation programme pursued by Dubai, providing a further opportunity for foreign investment and fostering a culture of world-leading innovation and industry,” he added.

In a statement, Dubai Taxi Company said that it will offer 624,750,000 shares each with a nominal value of Dhs0.04 will be made available in the offering, representing 24.99% of its total issued share capital. The Department of Finance (on behalf of the Dubai government) is the selling shareholder.

The listing will be available to the UAE retail investors and other investors, professional investors outside the US, including the UAE. The subscription period will open on November 21 and ends on November 28 for the UAE’s retail Investors and on November 29 for professional investors. The final offer price will be determined through the application of a book-building process.

The Department of Finance has the right to amend the size of the offering and tranche size before the subscription period concludes, subject to the approval of the Securities and Commodities Authority (SCA). The offering is compliant with Shariah principles.

Dividends

Post the IPO, the company intends to pay dividends twice each year in April and October in the fiscal year 2024. Dubai Taxi Company expects to distribute a first dividend of at least $19.33 million to be paid in April 2024.

For the fiscal year 2024 and the years thereafter, an earnings-linked framework with a minimum of 85% of annual net profit will be made available for distribution for the relevant period, the company said.

The IPO will see 5% each reserved for Emirates Investment Authority and the Pensions and Social Security Fund of Local Military Personnel (as part of the Qualified Investor Offering). The completion of the offering and admission is scheduled to take place in December.

Financial Advisors

Rothschild & Co Middle East has been appointed as the independent financial advisor. Citigroup Global Markets, Emirates NBD Capital, and Merrill Lynch International have been appointed as joint global coordinators and joint bookrunners.

EFG-Hermes UAE Limited (acting in conjunction with EFG Hermes (the UAE), and First Abu Dhabi Bank are joint bookrunners for the listing.

Emirates NBD Bank has been appointed as the lead receiving Bank. Abu Dhabi Islamic Bank, Ajman Bank, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates Islamic Bank, First Abu Dhabi Bank and Mashreq Bank have also been appointed as receiving banks.