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Dubai's Shuaa Capital sees first UAE IPO early June

2010-05-25

(Reuters) - Investment bank Shuaa Capital (SHUA.DU) is the lead manager on what could be the first initial public offering in the UAE this year, expected to raise over 1 billion dirhams ($272.3 million), its chief executive said. Sameer al Ansari said the Dubai-based investment bank was working with an Abu Dhabi-based company for the share sale expected in early June, speaking to reporters on the sidelines of a conference in Dubai on Monday. Ansari said the IPO would list in Abu Dhabi. However, he did not reveal the name of the company planning the share sale. The regional IPO market has struggled for revival in the wake of the global financial crisis. Tighter bank lending and cash flow problems have hit regional firms, the majority of which remain small-medium sized family businesses. There are signs however that IPO activity could pick up again this year. "There is pipeline of 300 companies that want to go public but that are not encouraged by the market environment. We are quite confident this (IPO) will open up the market," Ansari said, during a panel discussion earlier in the day. Ansari also said it would be a good idea for Dubai to sell its "crown jewels" through public listings over time, such as state-owned utility DEWA, in order to boost the regional capital markets. But valuations are still too low, he added .Dubai has an estimated debt burden of $101 billion, and several of its flagship companies have suffered from excessive borrowing to develop the now beleaguered real estate sector - debts which are likely to be in need of restructuring. Although the government has ringfenced its most prized assets for the time being, troubled Dubai World DBWLD.UL has said it has a program of asset sales planned to restructure some $23.5 billion in debt. Shares in Shuaa were trading 4.9 percent lower at 0915 GMT on the Dubai bourse.

 


 

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