Dubai-based Al Shafar General Contracting (ASGC) still aims to go public in the future after having to put on hold its plans for an initial share sale at the end of last year due to market conditions, its chief executive said. Reuters reported in September that the company, which has worked on projects including the Waldorf Astoria hotel on the emirate's manmade palm-shaped island, has chosen Goldman Sachs, EFG Hermes and Emirates NBD to arrange the listing.
The contractor had completed about "90 percent" of the preparations, including holding meetings with select investors in an exercise known as pilot fishing, and had planned to launch the offering in October, Bishoy Azmy, chief executive of ASGC, told a finance event. However, market volatility caused by weakness in the outlook for China's economy, which riled stock markets worldwide as investors feared the impact on global economic growth, forced it to cancel its plans, Azmy said.
Speaking to Reuters on the sidelines of the event, Azmy said the company had no immediate need to go public but it was part of its long-term plan. "There is nothing happening at the moment but when we think it's the right time to restart the process then we will. Currently, I don't see the markets being very receptive to a public offering on the DFM (Dubai Financial Market), especially in construction," Azmy said. There have been no new listings on the DFM since late-2014 as volatile market conditions and soured investor sentiment have put off companies from selling shares.
Meanwhile, Dubai real estate prices have softened since late-2014, following a boom fuelled by investment from countries impacted by the Arab Spring. While improved regulations are set to put off a crash, prices are expected to fall further this year. "As long as contractors are working within the environment of strategic, large-scale projects that are relevant to the government and the leadership, I think there is no problem," Azmy said when asked about the state of the real estate market.
"But maybe the private sector or the miscellaneous secondary real estate market may not be doing a lot of activity, hence there may be a slow-down in some of the lesser-strategic construction projects in town." ASGC was co-founded by Emad Azmy, an Egyptian engineer, and Emirati national Mohamed Seif Bin Shafar in 1989.
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