Dubai to divest stake in parking business

Dubai’s government intends to proceed with the privatisation plan aimed at reinforcing its capital markets by selling a 25 per cent ownership share in the city’s public parking business through an initial public offering, Bloomberg reported on Tuesday.

According to a statement, the Dubai Investment Fund plans to sell 749.7 million shares in Parkin. The subscription period will commence on March 5 and is slated to conclude on March 12. The bookbuilding period for institutional investors is set to end on March 13.

Parkin’s IPO follows approximately two months after Dubai generated $315 million from the initial public offering of the city’s taxi business. These share sales are a component of a strategy introduced at the close of 2021 to list 10 state-owned companies, aiming to enhance trading volumes and align with similar initiatives in Abu Dhabi and Riyadh.

According to Bloomberg data, the emirate has subsequently divested stakes in five companies, accumulating approximately $8.6 billion in funds raised.

The Emirates Investment Authority and the Pensions and Social Security Fund of Local Military Personnel will each have a reserved allocation of 5 per cent of the offering.

Moreover, Parkin has stated its intention to pay a minimum dividend for the entire fiscal year of 2024, equivalent to either 100 per cent of the profit or the free cash flow to equity, whichever amount is higher.

The energy-rich Arabian Gulf region has experienced a significant IPO surge over the past two years, with governments listing state-owned companies to secure funds for a post-oil era. This trend has been buoyed by elevated crude prices and increased international investor attention, contributing to the wave of initial public offerings in the region.

Emirates NBD Capital, Goldman Sachs Group Inc., and HSBC Holdings Plc have been appointed as joint global coordinators for Parkin’s IPO, with Rothschild & Co. serving as an independent financial advisor.