Abu Dhabi National Hotel Catering (ADNH Catering) is the latest company to announce its plan to go public this month.
Many companies have taken the initial public offering (IPO) route to raise funds to expand their services and operations within the UAE and beyond. The UAE bourses – Dubai Financial Market and Abu Dhabi Securities Exchange – have seen a flurry of IPOs in the past few years. In the second quarter, Alef Education listed on the Abu Dhabi bourse, raising $515 million (Dh1.89 billion).
All the previous IPOs attracted strong interest from both institutional and retail investors and were oversubscribed multiple times.
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Here are all the details that investors need to know about subscribing to ADNH Catering IPO:
What is ADNH Catering?
A subsidiary of the semi-government hospitality group Abu Dhabi National Hotels (ADNH Hotels), the firm offers a comprehensive range of services, including food preparation and service, as well as support services including general (non-technical) cleaning, housekeeping, pest control, and procurement services. It has operations extending to Saudi Arabia as well.
How many shares will be sold?
900 million shares will be up for subscription for retail and institutional investors.
How much stake will the firm float?
40 per cent of the company’s total issued share capital will be floated.
What is the nominal share value?
The company has announced a nominal value of Dh0.10.
When will the offer price be announced?
The company will determine the offer price after the book-building process.
When will the subscription open?
The subscription period will open on Monday, October 7 and end on Monday, October 14, for UAE retail investors and eligible employees. For professional investors, the subscription will end on Tuesday, October 15.
Will there be an allocation for existing shareholders?
Up to 10 per cent of the offer shares will be available for allocation to existing shareholders of ADNH Group who apply in either the First Tranche or the Second Tranche only in priority to other applicants. Existing shareholders of ADNH Group who apply for the Reserved Shares shall be accorded preferential rights to the Reserved Shares pro rata to their percentage holdings in ADNH Group as at the close of trading on Wednesday, October 2 – two days prior to the expected subscription commencement date.
Where and when will ADNH Catering list?
It will be listed on the Abu Dhabi Securities Exchange. The company plans to list in October. No date has been disclosed yet.
Will there be a lock-in period for selling shareholders?
The shares held by the selling shareholder shall be subject to a lock-up period which ends 180 days after the date of admission.
Through which banks can investors subscribe?
First Abu Dhabi Bank has been appointed as the lead receiving bank. Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Emirates NBD Bank and Emirates Islamic Bank have also been appointed as receiving banks.
Is it a Shariah-compliant offering?
The Internal Shariah Supervision Committee of First Abu Dhabi Bank has issued a pronouncement confirming that the offering is compliant with Shariah principles. However, investors are advised to do their own due diligence.
How much does the company plan to pay dividends?
The selling shareholder did not take a dividend from the group for the year ending September 30, 2024. The selling shareholder believes that both existing and new shareholders should benefit from a dividend from the Group for the financial year ending December 31, 2024. Therefore, following the offering, the company group intends to pay a cash dividend of Dh60 million in April 2025.
For the performance in the financial year ending December 31, 2025, the company intends to pay a total cash dividend of Dh180 million, split equally between the first half of the financial year (which is expected to be paid in October 2025) and the second half of the financial year (which is expected to be paid in April 2026).
For the performance in the financial year ending December 31, 2026, the company intends to increase the previous year’s dividend by a minimum of 5 per cent. The cash dividend will be split equally between the first half of the financial year (which is expected to be paid in October 2026) and the second half of the financial year (which is expected to be paid in April 2027).
From January 1, 2027, onwards, the company intends to adopt a progressive dividend policy linked to the group’s financial performance. The company intends to continue paying cash dividends on a semi-annual basis.