Dubai's Salik to sell 20% of its shares via IPO

Dubai road-toll operator Salik is selling 20 per cent of the company via an initial public offering, the company said in its intention to float document on Monday.

Salik, which was converted into a private joint stock company in June, is selling 1.5 billion shares to the public with a listing planned around Sept. 29, it said in the document.

Dubai announced plans in November to turn Salik, then a division of the Roads and Transport Authority (RTA), into a public company. 

The offering will begin on September 13 and 1.5 billion shares in Salik will be available with the IPO expected to raise over AED 3.6 billion.

Following the Offering, the Company intends to pay dividends twice, in April and October of each fiscal year.

It expects to pay a first dividend for the second half of 2022 by April 2023, and it expects to pay 100% of the net profit, after keeping aside the statutory reserves required by law (statutory reserves expected to amount to AED 37.5 million for the first dividend).

From 2023 onwards, the Company expects to pay 100 per cent of the net profit available for distribution as dividend. This dividend policy is subject to consideration by the Board of Directors of the cash management requirements of the Company’s business for operating expenses, interest expenses and anticipated capital expenditures and investments.

In addition, the Company expects that the Board will also consider market conditions, the then current operating environment in the Company’s markets, and the Board’s outlook for the Company’s business and growth opportunities.

Joint lead managers include Emirates NBD Capital, EFG-Hermes and HSBC Bank Middle East.

The Salik system was introduced to Dubai’s roads in 2007 and is Arabic for ‘open’.

Ibrahim Al Haddad, the CEO of Salik spoke to Dubai Eye 103.8's The Business Breakfast about why the toll-operator has decided to go public.

He added that introducing any additional toll gates or changing the tariff structure would be based on technical studies by the Roads and Transport Authority (RTA) and final approvals from the Dubai Executive Council.