Dubai establishes Salik as public joint-stock company ahead of possible IPO

Sheikh Mohammed bin Rashid, vice president and ruler of Dubai, has issued a regulation to transform the emirate’s road toll operator Salik into a public joint-stock company ahead of its potential IPO.

Under Law No. (12) of 2022, the Government of Dubai owns all shares of Salik Company, the Dubai Media Office said in a statement on Wednesday.

“The Dubai Executive Council is authorized to determine the percentage of shares that may be offered for subscription either through an IPO or a private placement,” the statement said.

The company will have “legal, financial and administrative autonomy to carry out its activities and achieve its objectives”, he added.

He did not say when or what percentage of shares the government plans to sell to Salik.

Dubai announced plans in November to list 10 state-owned companies to increase the size of its financial market to 3 trillion dirhams ($816.8 billion), as well as create a 2 billion market maker fund dirhams to encourage the listing of more private companies in sectors such as energy, logistics and retail.

Officials said last year that Salik would be among the public entities listed on the Dubai Financial Market.

Last week, the emirate announced the listing of 12.5% ​​of Tecom Group, the operator of business districts that house more than 7,800 businesses, on the DFM.

Dubai Holding will sell 625 million shares of Tecom, which comprises 10 business districts including Dubai Internet City, Dubai Media City and Dubai Design District, the company announced at the time.

The price range for the listing will be announced on June 16, the same day the IPO subscription begins.

Tecom’s listing follows the sale of shares in the Dubai Electricity and Water Authority in April. The utility, with business activities such as power generation, transmission and distribution, water desalination and district cooling, was the first government entity to feature on the DFM.

Dewa raised 22.41 billion dirhams through its IPO, making it the largest public float in the Middle East and Europe since Saudi Aramco went public in 2019.

Effective from the date of its enactment, the new legislation announced on Wednesday creates the Salik company with a term of 99 years, which automatically renews for the same period in accordance with the company’s articles of association.

The company, which is headquartered in Dubai, may open branches and offices inside and outside the emirate, according to the statement.

The emirate’s Roads and Transport Authority (RTA) is authorized to outsource some or all of Salik’s functions related to the operation and management of toll plazas.

“According to the law, toll proceeds, including fees and fines, will be transferred to the company in accordance with the concession contract signed between RTA and Salik,” the media office said.

Existing toll gates in Dubai may be removed or modified subject to an order from the Chairman of the Executive Council of Dubai. New toll gates may also be added subject to council approval, once RTA has conducted a “thorough traffic study in coordination with Salik”.

“Salik is exclusively authorized to operate, manage and develop the road toll system in Dubai,” the statement said.

The company is also responsible for the implementation of toll legislation and the development, operation and management of traffic systems in accordance with contracts in Dubai and outside the emirate, he said. added.

Updated: June 15, 2022, 2:38 PM