Insurance House IPO to go forward after it barely meets minimum subscription amount.
Insurance House IPO squeezes past the post
The UAE's first initial public offering (IPO) in more than two years will go forward after just meeting the capital requirements necessary to list, company officials said.
Insurance House raised Dh66 million (US$17.9m) in the two weeks since offering subscriptions but reached the threshold only hours before a 5pm deadline on Wednesday.
"We had doubts that it would close," said a spokesman for Insurance House. "We crossed the Dh66m coverage midday yesterday."
The listing was open only to UAE nationals and required a minimum subscription of 25,000 shares per investor. The shares sold comprise 55 per cent of Insurance House, with the company's board owning the remaining 45 per cent.
Non-nationals can buy shares in the company after it is listed on the Abu Dhabi Securities Exchange (ADX). A listing date has not yet been announced.
According to UAE regulations, all new insurance companies must be publicly listed, with a minimum capital of Dh100m and at least 55 per cent of shares sold to the public.
Most subscription requests were for the minimum amount of 25,000 shares, although some investors bought a "couple of million" shares, said Majd Maaitah, the director of securities services at National Bank of Abu Dhabi, one of the four receiving banks for the IPO.
"We had a variance between small and big investors, and I received quite a good number of applications," Mr Maaitah said.
Had the IPO not met the capital requirements, Insurance House would have had been obliged to ask the Emirates Securities and Commodities Authority for an extension of a few days, Mr Maaitah said.
The Insurance House spokesman said the company was pleased to move forward with the listing given difficult market conditions.
In line with a slump in markets across the region, the ADX has shed 4.5 per cent of its value amid unrest across the Mena region in the period since Zine el Abidine Ben Ali was overthrown as Tunisian president in January. Even before the unrest began, UAE markets were in the midst of an extended period of low trading volumes.
An IPO by Axiom Telecom, a mobile phone retailer based in Dubai, was scrapped at the end of last year because of poor market conditions.