Salik Announces Initial Public Offering
DUBAI, United Arab Emirates (AP) — Salik, Dubai’s toll gate operator, announced on Monday that it will make an initial public offering (IPO) on the Dubai Financial Market. This move follows the city’s plan to list 10 state industries on the stock market to raise capital and boost its profile.
Salik Offers 1.5 Billion Shares
Salik plans to offer 1.5 billion shares, which accounts for 20% of the company’s value. The per-share price will be announced on September 22, just a week before the shares start trading on the bourse.
Sheikh Maktoum’s Vision
Sheikh Maktoum bin Mohammed Al Maktoum, the son of Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum, announced this initiative last November. The goal is to list state industries to attract investors and generate new capital for Dubai.
Mixed Results for Investors
Dubai’s state power utility and free-zone operator TECOM have shown mixed results since their listings. The state power utility trades barely higher than its opening, while TECOM trades just below its initial price.
Salik’s Toll Operations
Since 2007, Salik has been tolling drivers on Sheikh Zayed Road. The toll system includes eight gates, charging drivers 4 dirhams ($1.09) each time they pass through using radio-frequency identification tags on their vehicles. Despite alternatives, many drivers still use Sheikh Zayed Road, making Salik a significant revenue source for Dubai’s Roads and Transport Authority.
Major Profits for Salik
With over 3.6 million vehicles in the UAE having Salik tags, the toll gate operator reported profits exceeding $353 million last year. Salik recorded around 370 million charged trips through its gates, showcasing its profitability.
Potential Price Increases
Salik has government permission to increase rates based on inflation. The company is also considering dynamic pricing, which could charge drivers more during peak times.
Salik’s IPO marks a significant step in Dubai’s broader economic strategy to enhance its stock market presence and attract global investors.