Dubai district cooling firm Empower to sell 10% stake in IPO

Dubai plans to sell a 10 per cent stake in Emirates Central Cooling Systems Corp., the city’s fourth privatisation this year as part of a drive to boost trading volumes on the stock exchange.

Dubai Electricity & Water Authority and Emirates Power Investment will offer 1 billion shares in an initial public offering, according to an advertisement in Gulf News. The district cooling firm, known as Empower, will start taking investor orders for the IPO from October 31, with pricing scheduled for November 9.

Empower’s IPO is part of the government’s privatisation drive to increase liquidity. Dubai’s three listings this year, including that of Dubai Electricity, have raised about $7.6bn combined.

High oil prices and investor inflows have driven a IPO boom across the energy-rich Gulf, with firms finding overwhelming levels of demand at a time when listings have shuddered to a halt in most other markets. The Middle East is headed for its second-best year after 2019, which saw the record $29.4bn IPO of Saudi oil giant Aramco.

An earlier rally in regional equities has faltered, however, and oil prices have tumbled 30 per cent from a high in June on concerns aggressive interest rate rises could tip the global economy into recession and crimp energy demand.

Empower, established almost two decades ago, is 70 per cent owned by Dubai Electricity. The firm has said it expects the minimum annual dividend to remain at Dhs850m ($231m) annually for two years after the IPO. Emirates NBD Capital and EFG Hermes are joint lead managers of the IPO.