Dubai’s ALEC IPO Sells Out, Raises Up to $381 Million Today

UPDATE: Dubai’s latest initial public offering (IPO) for ALEC Engineering & Contracting LLC has officially sold out, attracting overwhelming demand for all 1 billion shares on offer. This urgent development comes as the emirate seeks to capitalize on a booming construction sector, with the IPO valued at up to $381 million.

The state-backed Investment Corp. of Dubai announced the price range for ALEC’s shares between 1.35 and 1.40 dirhams (approximately $0.37-$0.38) apiece. The upper limit of this range places ALEC’s valuation at a significant $1.91 billion, signaling strong investor confidence in the company’s future.

Books for the IPO were fully covered shortly after opening, underscoring the intense interest from both local and international investors. The subscription period is set to close on September 30, 2023, with shares expected to commence trading on the Dubai Financial Market on October 15, 2023.

ALEC is well-known for delivering substantial projects across the UAE and Saudi Arabia, including high-profile developments like Abu Dhabi’s SeaWorld and Dubai’s One Za’abeel tower. The company is now expanding into the data center sector, having recently secured a 5.3 billion dirham contract for the Stargate data center project in Abu Dhabi. CEO Barry Lewis indicated that ALEC is also exploring partnerships in Saudi Arabia with firms like Humain and Khazna.

Despite concerns over budget constraints in Saudi Arabia due to lower oil prices, Lewis affirmed that ALEC’s pipeline in the kingdom remains intact, reflecting the company’s resilience in a fluctuating market. ALEC reported a 53% year-on-year increase in net income, reaching 363 million dirhams in 2024, showcasing its robust financial health.

Furthermore, ALEC plans to distribute a 200 million dirham dividend in April 2026, followed by an additional 500 million dirhams split between October 2026 and April 2027. This strategy highlights ALEC’s commitment to delivering value to its shareholders as the company continues to grow.

Dubai’s ongoing privatization initiative has successfully raised around $9.6 billion since its inception in 2021, including previous IPOs of various state-owned enterprises such as utility companies and transportation services. The emirate’s ruler recently launched a $584 million residential real estate investment trust, indicating a proactive approach to diversifying its economic portfolio.

With this IPO, Dubai not only reinforces its position as a global investment hub but also reflects the broader recovery and expansion trends within the Middle East’s construction industry. Investors and stakeholders will be closely monitoring the upcoming share listing, as it marks a significant milestone in Dubai’s economic landscape.

Stay tuned for more updates on this developing story and its implications for the regional market.