RAK Properties IPO sets new record

Firm's IPO more than 50 times oversubscribed

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By  David Robinson Published  April 14, 2005

RAK Properties said its Dh1.1 billion (around $300 million) Initial Public Offering (IPO) was more than 50 times oversubscribed, according to the initial figures, exceeding all expectations. The IPO set a new record for the UAE's capital markets by raising in excess of Dh50 billion from investors in just 14 days, confirming the appetite in the cash-rich region for share investments. RAK Properties is the real estate development company set up by the Investment and Development office of the UAE's Ras Al Khaimah government. Dr Izzat Dajani, chief executive of the Investment and Development office of RAK, said: 'The overwhelming response to the IPO from investors in the UAE, GCC nationals, expatriates, and corporations, is a tribute to the vision and initiative of RAK Crown Prince and Deputy Ruler Shaikh Saud bin Saqr Al Qasimi. 'Shaikh Saud has been the driving force behind this initiative. 'The IPO is the first stage of a strategy to capitalise on the vast potential of RAK and which will result in a real estate success story that we believe will be unprecedented anywhere.' He added: 'The development company was set up by the Investment and Development Office of Ras Al Khaimah and we can expect many more such initiatives. 'The development taking place in the emirate has the complete support of the ruling family. With this behind it, we believe success is assured.' The unqualified success of the IPO confirms the confidence of investors in the UAE as a prime investment destination and the financial hub of the Middle East. 'The receiving banks and lead managers have managed the subscription process effectively and efficiently,' Dr Dajani said. RAK Properties will shortly meet the banks involved in the IPO to finalise the allotment of shares to investors. The banks involved in the decision include National Bank of Abu Dhabi, the main subscription bank and records Manager for the IPO; National Bank of Ras Al Khaimah; International Commercial Bank; Abu Dhabi Islamic Bank; First Gulf Bank; and United Arab Bank. The banks will also begin the process of returning the excess funds deposited by investors and advise them of the details. Dr Dajani said: 'This IPO completes the first stage of the plan devised by the founders and management of RAK Properties to begin large scale development in the emirate. The tremendous success of the IPO will inspire us to work towards even more ambitious targets.' Under the terms of the public offering, 200 million shares will be available pro rata to small investors, with a minimum subscription of 20,000 shares, and a maximum of 100,000 shares. The remaining 900 million shares will be offered to individuals and institutions, and the minimum subscription for these is Dh101,000. Share allocations will be carried out on a pro rata basis for the two relevant categories of investors. 'We would like to thank all those who participated in this offering and assure them that the final allocation process will be completed as quickly as possible,' Dr Dajani said. 'Once the pro rata allocation of subscriptions has been finalised by the Lead Manager, all investors will be informed of their final stake.' He said a series of groundbreaking projects would be announced imminently by the company.-

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