Dubai: Logistics firm Tristar has cancelled plans for an initial public offering in Dubai due to a lack of investor interest, according to two sources familiar with the matter who spoke to Reuters on Wednesday.
Tristar’s public share sale began on April 4, with a price range implying a market capitalisation of 2.64-3.24 billion dirhams ($719-$882 million).
The company saw low demand for its shares, according to the sources, who declined to be identified because the matter is private.
The offering was scheduled to end on April 15.
Setback for Dubai
After the recent retirement from major companies the deal collapsed is another setback for Dubai’s stock exchange. In three years, the IPO of Tristar would only have been the second listing in the financial hub that is Dubai.
The stock exchange has already experienced a reduction in volumes with a total value of approximately $18 billion traded last year in the Dubai financial market. That put it well behind the exchange of Saudi Arabia, which saw shares changing hands in $557 billion in 2020, a jump of 137 percent from the previous year.
Dubai Threatens to Drive Investors Away as Public Companies Delist
Tristar had initially intended to sell shares in London, but those plans were abandoned following the discovery of $6 billion in hidden debt at London-listed firm NMC Health Plc, raising concerns among global investors about governance and transparency issues at Gulf firms.
The sale is being coordinated globally by Bank of America Corp. and Citigroup Inc. The sale also involves First Abu Dhabi Bank PJSC, HSBC Bank Middle East Limited, Societe Generale SA, and Kuwait Financial Centre KPSC. Moelis & Co is advising on the sale.
Tristar did not immediately respond to requests for comment.
Tristar, which is owned in part by Kuwaiti logistics firm Agility, had planned to list in London, but plans were shelved after turmoil at London-listed healthcare firm NMC shook investor confidence in Gulf companies.
Tristar said earlier this month that its primary offering would raise between Dh438 million and Dh537 million, with a secondary offering raising another 90 to 240 million.
The deal’s global coordinators and joint bookrunners were BofA Securities and Citigroup.
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