Empower plans to sell 10% stake, list on Dubai Financial Market

Emirates Central Cooling Systems Corporation (Empower) on Monday announced its intention to proceed with an initial public offering (IPO) and to list a portion of its ordinary shares for trading on the Dubai Financial Market (DFM).

In a press conference on Monday, Empower said that one billion (1,000,000,000) Shares, each with a nominal value of Dhs0.10 (ten fils) will be made available in the Offering, representing 10 per cent of Empower’s total existing share capital.

It added that all shares to be offered represent the sale of existing shares held in aggregate by Dewa and Emirates Power (an indirectly wholly owned subsidiary of Dubai Holding) (together the “Selling Shareholders”), with Dewa selling 7 per cent and Emirates Power selling 3 per cent in the Offering.

The corporation added that the Selling Shareholders reserve the right to amend the size of the Offering (in whole and/or individual tranches) at any time before the end of the subscription period of the Second Tranche, subject to applicable laws and approval by the Securities and Commodities Authority (SCA).

The subscription period will open on Oct.31, 2022 and is expected to close on Nov.7, 2022 for the UAE Retail Investors and on Nov.8, 2022 for Qualified Investors.

The Internal Sharia Supervision Committee of Emirates NBD Bank has issued a pronouncement confirming that, in its view, the Offering is compliant with Shariah principles.

The company’s existing share capital consists of 10,000,000,000 ordinary shares, each with a nominal value of Dhs0.10, which are fully paid, issued and outstanding.

Following the Offering, the Company intends to adopt a semi-annual dividend distribution policy and to pay dividends twice each fiscal year after the Offering in April and October of each year.

The Group expects to pay a minimum dividend amount of Dhs850 million per annum, in the first two fiscal years following the Offering (April 2023 to October 2024). The Company expects to distribute its first dividend payment of a minimum of Dhs425 million after the Offering, for the second half of 2022, by April 2023. After the October 2024 distribution, the Company expects to pay a sustainable dividend in line with the growth of the business.

This dividend policy is designed to reflect the Company’s expectation of strong cash flows and expected long-term earnings potential, while allowing the Company to retain sufficient capital to fund ongoing operating requirements and continued investment for long-term growth.

This dividend policy is subject to consideration of the Board of Directors of the cash management requirements of the Company’s business for operating expenses, financing expenses and anticipated capital expenditures.

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

Saeed Mohammed Ahmad Al Tayer, Chairman of Empower, said, “Thanks to the vision and directives of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, and the follow-up from His Highness Sheikh Maktoum Bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, Dubai is moving steadily to become a leading global economic hub.

“Dubai aims to increase the total volume of its stock markets to Dhs3 trillion. Empower’s superior technology and successful track record in acquiring iconic projects in Dubai reflect the key role Dewa and its subsidiaries are playing in Dubai’s green energy transition process. Empower’s ability to continuously leverage its scale and knowledge qualifies the Company to be well-positioned for growth in markets where district cooling plays an important societal role.

“At the heart of Empower’s strategy is supporting Dubai’s energy transition; by providing access to sustainable cooling solutions and increased energy efficiency, better water efficiency, and encouraging responsible energy consumption. The Company’s long-term principles ensure inclusion, empowerment, diversity and gender equality.”

Ahmad bin Shafar, Chief Executive Officer of Empower, added, “With a targeted market share of 80 per cent in the Emirate of Dubai by the end of 2022, Empower supports and benefits from the city’s fast-paced economic growth. This includes mega-trends such as expansion in infrastructure, a rising population and hot climates, which continue to accelerate the need for more efficient and sustainable cooling at scale.

“As a leading player in the implementation of district cooling technology as well as the deployment of a more sustainable cooling method in Dubai, Empower provides investors with a unique opportunity to invest in a Company that operates in a market that has solid macroeconomic fundamentals for district cooling, making it a growth engine for Empower.”