The Founders Committee of Marka, a public joint stock company under incorporation with a capital of Dhs500m, announced that the company will use the proceeds from the IPO towards capital expenditures and operating expenses associated with the opening of fashion stores, restaurants and cafes.
It is planned that the company will allocate 50% of its investments for retail and the other 50% will be allocated for the opening of restaurants and cafes. These investments will see the introduction of five new concepts in fashion and six new concepts in restaurants and cafes over the next five years.
The announcement was made during a media round table held at the Jumeirah Emirates Towers Hotel today. The event was attended by Jamal Al Hai, Chairman of Marka Founders Committee, Khalid Almheiri, Deputy Chairman of the Founders Committee and Dr. Mahdi Mattar, CEO of CAPM Investment, Marka’s financial advisor and lead manager of the IPO.
The committee unveiled that the company plans to open more than 100 outlets of fashion stores, restaurants and cafes, in the UAE and the rest of the GCC countries. These outlets will be opened gradually at strategically selected sites.
The IPO of Marka is scheduled to begin on April 13 and will continue until April 24, 2014. Jamal Al Hai expects that the IPO will enjoy a huge turnout in attributed to projected strong growth company prospects due in part to Marka’s focus on the introduction of new concepts in the retail and F&B sectors in the UAE and the broader GCC region. He said, “Both these sectors are witnessing increased activities and high profit margins exceeding the prevailing rates in many other sectors.”
Al Hai added, “We expect that a large turnout for Marka’s shares will revive the IPO market in the UAE by encouraging other companies to go ahead with their IPO plans. We have seen the market’s thirst and interest in new IPOs from the different stages of establishing Marka, from the idea conception period until we received the final approvals. Our beliefs were further bolstered by the rapid conclusion of Marka’s Founders’ equity subscription, where 151 founders, including an elite group of VIPs, dignitaries, businessmen and prominent investors subscribed to the company’s shares as its founders and paid their contributions amounting to Dhs225 (equivalent to 45% of the Marka capital). Marka Founders’ equity was subscribed in record time, reflecting the founders’ confidence in the company’s success prospects in quickly establishing itself among the leading players in the retail and F&B sectors in the UAE and the region.”
Khaled Almheiri, Deputy Chairman of Marka Founders Committee, said, “In addition to Marka being the first public shareholding company operating in the UAE’s retail sector and F&B sectors, the significant growth prospect of the company along with the growing confidence in the local economy and the current recovery in the stock markets in the country all contribute to stimulating the demand for IPO shares.”
Almheiri added, “Marka seeks to establish itself as a leader in the retail and F&B markets in the GCC. It will introduce to the regional markets innovative global brands and concepts in the fields of fashion, restaurants and cafes, which will be announced soon. This will give the company a significant competitive advantage enabling it to quickly acquire a growing customer base. The company’s investment strategy also includes the acquisition of franchises and the introduction of global brands, as well as taking advantage of the available opportunities to develop brands organically.”
He said, “Marka in its first phase will focus on creating a strong presence in Abu Dhabi and Dubai in particular, and will gradually be expanding into the rest of the region. Al Muhairi noted that in the second phase Marka will introduce new brands and concepts to the markets of Saudi Arabia, Kuwait and Qatar.”
Dr. Mahdi Mattar, CEO of CAPM Investment, said, “We expect to have large turnout and an IPO oversubscription due to the high growth prospects which the company enjoys, on the one hand, and the return of confidence to the financial markets, on the other. Historically, IPOs come within the top priority for small and large investors, as they allow investors to build positions in joint stock companies in the early stages, and thus benefit from the entire growth prospects in stock prices over the medium and long term.”
He added, “Subscription to Marka shares is also an ideal choice for enterprises because the company will work within two of the fastest growing sectors, which will take advantage of the record growth in the number of tourist influx to the country. This trend is expected to continue at double-digit growth rates in the coming years with the emergence of the UAE among the most attractive tourist destinations globally. In addition, these two sectors enjoy a rising demand from a base of which the middle and high-income population represent a large segment compared to many countries worldwide.”
Earlier this week, the UAE Securities and Commodities Authority granted the final approval to offer 55% of Marka shares for public subscription. 275 million shares will be offered to the public in an IPO at the price of AED1 per share plus a premium of 3 fils per share. Investors can subscribe to Marka shares through the selected branches of eight banks and financial institutions from April 13, for 12 days. The subscription period will be closed on April 24, 2014.
Eight banks and financial institutions will receive the contributions of the investors willing to subscribe to the company’s shares, including National Bank of Abu Dhabi, Union National Bank, Abu Dhabi Commercial Bank, Dubai Islamic Bank, National Bank of Fujairah, Commercial Bank International, Finance House and Islamic Finance House.
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