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Dubai: Depa, an interiors fit-out company which is designing the interiors of the world's tallest tower Burj Dubai, yesterday said it has commenced the initial public offering (IPO) of up to 278.9 million of its stock in the form of shares and global depositary receipts (GDR), each representing five shares.
The offering has an indicative price range of $1.50 to $1.85 per share and $7.50 to $9.25 per GDR. The IPO is expected to raise as much as $516 million (Dh1.9 billion), which will help Depa finance expansion, including acquisitions.
For the first time in the Middle East, investors subscribing to purchase shares in an IPO are guaranteed the allocation they apply for until all the shares in the IPO have been sold.
"Depa has chosen to use an innovative subscription process based on "first come first served.
"Depa hopes its subscription process will minimise the costs investors have to bear during the usual IPO procedures and eliminate potential disappointments among investors waiting to find out whether or not they will receive an allocation," it said.
Applicants subscribing to Depa's offer through one of the participating brokers will have to choose one of seven fixed subscription tranches (Dh25,000, Dh50,000, Dh75,000, Dh100,000, Dh250,000, Dh500,000, or Dh1 million).
"Whether the applicant is successful or not, this process entails an explicit financing cost [opportunity cost] whether investors borrow funds from banks or use their own funds to apply for IPO shares. Applicants subscribing to Depa's shares will know exactly how much funding they require as well as their allocation of shares at the time of application."
Morgan Stanley will act as sole global coordinator, joint bookrunner and joint lead manager.
UBS Investment Bank will act as joint bookrunner and joint lead manager and Global Investment House and The National Investor will act as joint lead managers.
Depa has granted Morgan Stanley, UBS Investment Bank, Global Investment House and The National Investor an over-allotment option to purchase up to 25,355,106 shares at the offer price.
The offering represents approximately 41 per cent of the issued share capital (or approximately 43 per cent if the over-allotment option is exercised in full).
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