DUBAI - UAE's Daman Investments is looking
to sell shares to the public by 2012 to strengthen its financial
position, it said on Tuesday, as it looks to tap opportunities
in the world's largest oil exporting region.
Daman Investments, which is active in asset management,
brokerage and venture capital, intends to float around 30
percent of its capital with the IPO and seeks a listing on
either the Dubai or Abu Dhabi exchange.
The IPO's proceeds will be used to finance brokerage
activities, to fund the company's commitments and to boost its
warchest for possible acquisitions, Chief Executive Shebab
Gargash told Reuters.
"We are convinced opportunities will arise in the wake of
the financial crisis," Gargash told reporters.
Daman's IPO plans reflect the slow but gradual return of
companies' appetite to return to the capital markets, a trend
that came to a standstill as a result of the financial crisis.
"We have taken a hard look at the markets and are confident
our long term, positive view is justified," Gargash said.
Daman added that the firm this year had attracted a
strategic investor, who had committed to invest 100 million
dirhams ($27.2 million), and was moving ahead to secure
additional equity investment of about 200 million UAE dirhams
($54.5 million) in coming weeks.
After the first round of fundraising, the firm's valuation
will be 850 million dirhams, Gargash said. In the near future,
Daman could raise an additional 300 million, he added.
Over the next three years the firm's original shareholder
base would be increased from 2 million shares to a maximum of 4
million shares, Gargash said.
Analysts expect IPO activity to gather steam again from
2010.
Four companies have listed in the Middle East in the third
quarter raising $871.79 million compared with 14 IPOs raising
$3.74 billion during the same period last year, Ernst & Young
said in a report on Monday.
"Companies are still wary of the strength of the recovery in
the region," said Phil Gandier, a managing partner at Ernst &
Young Middle East, adding the region had 152 announced, delayed
or rumoured IPOs in the pipeline.
"Whilst the market may not change significantly during the
remainder of this year, once there is evidence of a sustained
recovery in the region, there is likely to be an increase of
fundraising on the regional stock markets," Gandier said.
Daman, formed in 2000 by prominent UAE businessmen, acts as
a parent company for several wholly-owned subsidiaries with
activities ranging from asset management to private equity.