Mubadala group to put up Abu Dhabi's first IPO since 2017, more to follow

Al Yah Satellite Communications, fully owned by Abu Dhabi's $243 billion sovereign fund, plans to offer a stake of as much as 40% next month.

Satellite operator Yahsat has filed for a listing in Abu Dhabi in what would be the first initial public offering on the emirate’s stock exchange since 2017.

Al Yah Satellite Communications Co., fully owned by Abu Dhabi’s $243 billion sovereign fund Mubadala Investment Co., plans to offer a stake of as much as 40% next month, according to a statement. The company offers satellite communications solutions in over 150 countries.

Abu Dhabi’s top state holdings are stepping up efforts to boost the domestic equity market and diversify the economy away from oil. Sovereign funds ADQ and Mubadala -- alongside the emirate’s state energy company -- have signaled their intentions to list more assets locally.

Aside from Yahsat, Mubadala is also considering an IPO of Emirates Global Aluminum PJSC while Abu Dhabi National Oil Co. seeks the same for its drilling business and a fertilizer joint venture. Chipmaker GlobalFoundries, backed by Mubadala, has meanwhile started preparations for a U.S. IPO.

Speaking in an interview with Bloomberg Television, Musabbeh Al Kaabi, chief executive officer of UAE investments at Mubadala, said Yahsat’s plan is a vote of confidence in the Abu Dhabi Securities Exchange, whose performance this year ranks it among the best globally, and reflects the resilience of the economy of the United Arab Emirates.

‘Technology Play’
 

“We’re bringing a technology play to the market,” said Al Kaabi, who’s also chairman of the board of directors at Yahsat. “So that will provide the diversity in the market. And we’ll position the ADX as a leading market in the region.”

Yahsat posted 2020 revenue of $408 million, underpinned by long-term UAE government contracts, and has a future backlog worth $2.2 billion, it said. The company boasts a fleet of five satellites and owns satellite phone operator Thuraya Telecommunications.

Listing technology companies on the local stock market is “at the heart of the economic diversification agenda that Mubadala embraced more than 15 years back,” Al Kaabi said. Emirates Global Aluminium is “definitely a candidate” to list and is working with advisers on identifying the right timing, he said.

The wealth fund’s focus is increasingly on helping a range of non-oil industries -- from life sciences and health care to advanced manufacturing -- to take root locally.

“We’re anticipating more activities and pushing the agenda on the newer sectors,” Al Kaabi said. “These are some of the ideas that we’re trying to push going forward and try to help on the economic diversification of the UAE.”

Yahsat offer details:
 

IPO for minimum 731.9 million shares and a maximum 975.9 million shares, representing minimum 30% stake and maximum of 40% stake in the company
 

Offer expected to close July 6 for first and third tranche and July 8 for second tranche
 

Final offer price and size: July 9
 

Expected date of listing in Abu Dhabi: July 14
 

Joint global coordinators: First Abu Dhabi Bank, Merrill Lynch and Morgan Stanley
 

Joint bookrunners: Abu Dhabi Commercial Bank, EFG-Hermes and HSBC Bank Middle East
 

Yahsat’s share sale would mark the first IPO in Abu Dhabi since Abu Dhabi National Oil Co. for Distribution PJSC began trading in 2017