Pipeline of IPOs From U.A.E. in Full Flow Ahead of Aramco Sale

  • Six deals could raise $11 billion over next few quarters
  • Activity the ‘busiest in several years’: Barclays’ Johnson

QuickTake: The Business of Saudi Aramco

Saudi Arabian Oil Co. isn’t the only one keeping IPO markets busy in the Middle East.

A slew of companies from the United Arab Emirates, both sovereign-owned and privately held, is lining up initial public offerings in a bid to capitalize on money returning to emerging-market funds this year and as states in the region make their stock exchanges more liquid.

“We are seeing a growing IPO pipeline across sectors in the Middle East as economies in the region have increasingly diversified away from natural resources over the last 10 years, or so,” said Tom Johnson, head of equity capital markets in Europe, the Middle East and Africa at Barclays Plc. “Importantly, emerging-market funds have seen inflows, making more money available for IPOs.”

At least six new listings from the Emirates that may raise as much as $11 billion are at various stages of completion, according to people familiar with the plans. That’s a bit more than a tenth of the $100 billion Saudi Arabia could generate in 2018 from a planned sale of as much as 5 percent of Saudi Aramco, as the state-owned oil giant is better known.

Saudi Aramco “is a key consideration when it comes to the timing’’ of an IPO in the region, said Sanyalak Manibhandu, an Abu Dhabi-based equities analyst at NBAD Securities LLC. “You don’t want to be the one that comes to the market after Saudi Aramco sucked up all the liquidity. You want to be way ahead if you can possibly swing it.’’

To read more about Aramco’s IPO, click here

Companies in the Middle East and Africa have raised about $2.9 billion from IPOs that began trading in the last 12 months, compared with about $204 billion worldwide, according to data compiled by Bloomberg. Activity now is the busiest it has been in several years, said Johnson at Barclays.

Here’s more on the deals planned in Abu Dhabi and Dubai:

Abu Dhabi Ports

Abu Dhabi Ports Co., the government-run ports operator, has met with investment banks in recent weeks and may decide on financial advisers soon, people with knowledge of the plan said, asking not to be identified as the information is private. The company could raise at least $1 billion in a share sale on the local exchange, one of the people said. No final decisions have been taken, and the company may decide against a listing, they said.

Adnoc’s Service Stations

Abu Dhabi National Oil Co., which produces most of the crude in the U.A.E., is planning an IPO of its service stations that may ultimately fetch a value of about $10 billion and raise up to $3 billion from a listing, according to people familiar with the matter. The listing is likely to happen in Abu Dhabi, and selected underwriters include Bank of America Corp., Citigroup Inc. and HSBC Holdings Plc, people familiar said.

Emirates Global Aluminium

The largest aluminum producer in the Middle East is considering an IPO in Dubai and Abu Dhabi, potentially making it one of the first companies to be represented on both exchanges, according to people familiar with the plan. The dual listing, which could raise as much as $3 billion, would address any potential political concerns, since the company is owned by Abu Dhabi’s sovereign fund Mubadala Investment Co. and the Investment Corp. of Dubai.

Emaar’s Real Estate

Dubai’s Emaar Properties PJSC, the biggest company by market capitalization on the Emirate’s bourse, hired Goldman Sachs Group Inc. to manage the sale of shares in its U.A.E. real estate development business, Chairman Mohamed Alabbar said last month. The developer of the world’s tallest tower expects to complete the IPO by November, with a size similar to its Emaar Malls PJSC offering, which raised about $1.58 billion in 2014 and is the largest share sale in the U.A.E. in the past nine years, according to data compiled by Bloomberg.

Senaat

The industrial conglomerate, which holds stakes in Abu Dhabi’s National Petroleum Construction Co. and Emirates Steel, is considering reviving plans for an IPO three years after putting them on hold, people with knowledge of the matter said. The company plans to raise about $1 billion from the offering and list shares on the Abu Dhabi stock exchange before the end of the year, the people said.

GEMS Education

The private-school operator -- backed by private equity firms Blackstone Group LP and Fajr Capital Ltd. and wealth fund Bahrain Mumtalakat Holding Co. -- could fetch a valuation of about $4 billion or more in a potential IPO in London as early as next year, people familiar with the plans said last month.

— With assistance by Mahmoud Habboush, Matthew Martin, Dinesh Nair, Hussein Slim, Tracy Alloway, and Deena Kamel

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE