Empower IPO: share price to be confirmed on Nov. 9 as Dubai district cooler seeks new territories overseas
Dubai: Empower will confirm the share offering price on Nov. 9 and go through a DFM listing on Nov. 16, as another Dubai government entity revises its status to become a “public joint-stock company.” Empower, the world’s largest district cooling service provider, has an 80% share in Dubai and has confirmed that the next steps for growth could bring it into some of the other Gulf markets.
In Egypt, Empower – which “cools” Palm Island, Business Bay and Meydan, among others – had been invited to participate in tenders, but no decision was made. For IPO investors, what will matter will be the company’s entrenched presence in Dubai. “We have a highly visible revenue stream, predictive cash flow and a strong balance sheet,” an Empower spokesperson said. “We will add an additional 370,000 RTs (refrigerated tons) to our capacity immediately from existing master developers to the existing 1.6 million RTs from 81 district cooling plants in Dubai.”
In the medium term, Dubai aims to meet 40% of its cooling needs with district cooling services by 2030, which will also strengthen Empower’s place in the ranking.
The pure financiers
Last year, Empower’s revenue was 2.46 billion dirhams and net profit was 936 million dirhams. In the first half of 2022, they were respectively 1.12 billion dirhams and 268 million dirhams, while the EBITDA margin fluctuated around 49%.
So what will be the price of the Empower offer? Market analysts believe that around Dh2.30 to Dh2.50 a stock range is a strong possibility. Previous in Dubai, Salik, had it pegged at Dh2 flat which also helped it get off to a strong start on the day of listing. DEWA had theirs at Dh2.48 and Tecom Group opted for Dh2.67. Empower, in which DEWA owns 70%, plans to issue half-yearly dividends totaling a “minimum” of 850 million dirhams for the first two years.
- Empower’s journey to a DFM listing on November 16:
- The subscription period for the UAE retail offering will run from October 31 to November 7, with the subscription period for “accredited investors” running from October 31 to November 8.
- This is a secondary offering, with DEWA and Emirates Power planning to sell 7% and 3% of the issued share capital respectively. Empower will not receive any proceeds from the offer. Provided the size of the offer is not increased, the selling shareholders – DEWA and Emirates Power – will hold a stake of 63% and 27% respectively.
Empower’s other shareholder is Emirates Power Investment, an “indirect wholly-owned subsidiary of Dubai Holding”.
Through the sale of shares, DEWA will sell 7% and Emirates Power 3%. “At the heart of Empower’s strategy is supporting Dubai’s energy transition, providing access to sustainable cooling solutions and increased energy efficiency, improved water efficiency and encouraging energy consumption. responsible energy,” said Saeed Mohammed Ahmad Al Tayer, President of Empower.
Among the debt on its books, Empower has a “moderate debt profile” and the group has “considerable headroom in its borrowing capacity, supported by highly predictable cash flows, to continue to generate growth of organic and inorganic capacity”. “The Group believes this will result in a strong growth earnings profile and attractive dividend payouts,” it said in a statement.
“With a targeted market share of 80% in Dubai by the end of 2022, Empower supports and benefits from the city’s rapid economic growth,” said Ahmad Bin Shafar, CEO. “This includes mega-trends such as expansion in infrastructure, growing population and hot climates, which continue to accelerate the need for more efficient and sustainable large-scale cooling.”