Dubai aims to sell 20% of toll operator Salik and may hike costs to increase income and reduce traffic, the firm announced on Monday.
The emirate’s administration announced in Gulf News that it would sell 1.5 billion shares in Salik. According to Bloomberg News, the initial public offering (IPO) is projected to garner approximately $1 billion.
“The Roads & Transport Authority could implement dynamic pricing through optimizing the toll rates depending on the time of the day, for example, by charging a higher toll fee for specific lanes or during peak hours,” according to Salik’s IPO announcement.
The new pricing system could be modeled on similar systems such as the Dallas-Fort Worth LBJ Express, Singapore road tolls, and the Stockholm dynamic congestion zone and bridge tolls, Salik said.
The offering starts on September 13 and Salik is expected to be listed on the Dubai stock exchange on September 29, with joint lead managers including Emirates NBD Capital, EFG-Hermes, and HSBC Bank Middle East.
Salik’s IPO is the latest in a string of high-profile IPOs for the Gulf emirate, which saw record proceeds from listings in the first half of 2022.
But high oil prices and equity inflows that boosted markets have since faltered amid concerns about a possible recession.
Dubai plans to list 10 state-owned firms in a bid to combat years of falling trade volumes and compete with the bourses of neighboring Abu Dhabi and Saudi Arabia.
Before the latest spate, Dubai had seen just one small IPO since 2017, and a string of high-profile delistings.
Dubai Electricity and Water Authority (DEWA) has lost most of its early gains from its debut in April, while business park operator TECOM Group is trading 10 percent below its offer price.