Future Pipe Industries (FPI) is to list 35 per cent of the company solely on the Dubai International Financial Exchange (DIFX), the group said yesterday in a move expected to bolster confidence in the fledgling bourse.
Dubai-based FPI, the leading supplier of fibreglass pipes for city infrastructure is only the second firm after ports operator DP World to choose the DIFX as the sole exchange for its IPO.
The company could raise at least $400 million (Dh1.46bn), valuing it at between $1.4bn and $1.8bn, analysts estimate.
Rami Makhzoumi, President and CEO of FPI, told Emirates Business the decision was setting a “critical” precedent to other family-owned businesses considering a listing and that the DIFX presented an opportunity to boost the firm’s international profile.
“Unlike other exchanges in the region, the DIFX offers a minimum of a 25 per cent float. Many family businesses have no real intention to exit, some do but the most don’t. And they’ve never had the opportunity to get the benefits of being public without foregoing the majority of their business.
“We’ll be a very critical example for others to follow suit. We hope our float will open the doors to others who are on the fence.”
The price and number of shares on offer will be unveiled in FPI’s prospectus on April 13 and the listing is expected in early May. It will be open to global institutional investors, as well as UAE residents and GCC nationals.
A source close to the transaction said: “Clearly this is good news for the DIFX as it’s no secret that DP World’s share price has gone down. It’s good for confidence in the exchange but also for the market in general. Although the drop in share price of DP World is not the DIFX’s fault, it’s good to see that another company has decided to pursue a sole listing,” the source added.
DP World’s share price has struggled in recent months, falling by a third since listing in November last year on the DIFX.
But the sentiment for initial public offerings has been hurt recently as world markets continue to reel from the US sub-prime mortgage crisis. A series of delays and cancellations of share offerings in the region, including Nanodynamics and Al Qudra Holdings has undermined market confidence. However, FPI’s listing as well as last week’s decision by Dubai-based interiors contracting firm Depa to raise $400m in a dual listing on the DIFX and in London is expected to lift any gloom.
Future Pipe IPO to boost DIFX growth