UAE-based utility Utico is planning a share buyback ahead of its initial public offering (IPO) and listing later this year.
The privately held company is in talks with six banks for the IPO and listing.
“As part of the preparations for the IPO, changes in ownership structure are underway where consolidation is underway,” said Richard Menezes, founder and CEO of Utico.
“Discussions are ongoing with a major fund and an investor to acquire 100 percent of the company from its current investors and take it public in the fourth quarter of this year.”
As the company’s founder, Menezes said its appetite for growth and market potential are limited only by risk vs reward. Like-minded investors are supporting the move to move the company forward and align with Utico’s sustainable future, he said.
Utico is a Sustainable Business rated by DNV UK.
Utico is targeting a primary listing on the Dubai Financial Market (DFM) and may consider a secondary listing following discussions with the board and shareholders.
Meanwhile, Utico is committed to the IPO and possible listing with Goldman Sachs, HSBC, Standard Chartered, Emirates NBD (ENBD), First Abu Dhabi Bank and Citi.
The expected listing would be in the Dubai Electricity & Water Authority (DEWA) and ACWA Power Multiples range, with a liquid market looking for sustainable high growth stocks.
With DEWA and ACWA recently listing at 19x to 48x multiples, EBDITA, as listed, now offers yields of 4.6% and 1.5%, respectively, Menezes said, adding that Utico has a Annual dividend yield growth of 6 to 8 percent would be a very attractive proposition, beating inflation and market expectations.
With DEWA being placed in a fixed income category and ACWA in the growth category, Utico sits between the two as the largest private full spectrum utility and the largest IWP developer in the UAE.
This classifies Utico as a Fixed Income Plus stock that would deliver sustainable returns and growth for current and alternative new generation investors.
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