Cairo (APD) -Dana Gas, the Gulf's first private gas company to go public, is expected to announce by the end of week the results of its Initial Public Offering (IPO) as analysts expect allocation rates to range between 0.25% and 0.50%, Saudi business daily, al-Iktissadiah, reported Monday.
Dana Gas launched on September 22 its AED 2.06 billion IPO which represents 34.33% of the company's capital. Dana Gas' 300 founders from across the Arab Gulf states, including the government of Sharjah and major institutional and individual investors, have already subscribed to 65.67% of the firm's capital of AED 6 billion.
The subscription period ended on October 3. By then, some analysts had already estimated the IPO to have been oversubscribed 150 times. However, sources at Dana Gas denied such estimates.
The sources said that the number of subscribers was above 500,000 persons, adding that "oversubscription exceeded all expectations."
Analysts expected allocation rate to range at 0.25% if the IPO subscription exceeded AED 500 billion, while allocation rate would be 0.50% if the subscription reached AED 300 billion.
"If the allocation rate was set at 0.50% in case the subscription reached AED 300 billion, then this is considered a good percentage," Mohamed Yassin, an analyst, told al-Iktissadiah.
However, Yassin expected subscription to exceed that amount, based on the experience of previous IPO offerings in UAE, whose subscription had been open only to UAE nationals. "Although some previous offerings were only limited to UAE nationals, such offerings exceeded AED 300 billion. But, this was not the case of Dana Gas," he said.
Gulf investors, especially Saudi investors have been flocking to the receiving banks participating in the subscription. Some banking sources said that about 60% of the investors who subscribed in Dana Gas were Emirati investors while the remaining 40% were investors from other nationalities, but mainly Saudis.
"Since this offering was not limited to UAE nationals, and taking into consideration the huge number of Gulf investors, especially Saudis, who have subscribed in the offering so it is reasonable to say that subscription in Dana Gas could exceed AED 400 billion," Yassin added.
Dana Gas will be listed on the Abu Dhabi Securities Market. While it is being established in Sharjah and will be initially supplied with gas by its shareholder, Crescent Petroleum Company, Dana Gas intends to expand across the Middle East and develop gas-related enterprises. [TS]
By Eman Wahby, APD Staff Writer in Cairo
© APD (Arab Press Digest) 2005
