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Abu Dhabi, UAE:
Alef Education Holding plc (“Alef Education”, “Company” or “Group”), an award-winning AI-powered learning solutions provider based in Abu Dhabi, today announces the price range for the sale of its shares (the “Shares”, or each a “Share”) (the “Offer Price Range”) and start of the subscription period for its Initial Public Offering (“IPO” or “Offering”) on the Main Market of the Abu Dhabi Securities Exchange (“ADX”).
Key Highlights
- The Offer Price Range has been set between AED 1.30 and AED 1.35 per Share, implying a market capitalisation at the time of listing of between AED 9.10 billion (US$ 2.48 billion and AED 9.45 billion (US$ 2.57 billion).
- 1.4 billion (1,400,000,000) Shares, each with a nominal value of AED 0.01, are being made available in the Offering, representing 20% of the Company’s issued share capital. As a result, the total Offering size is expected to be between AED 1.82 billion (US$ 496 million) and AED 1.89 billion (US$ 515 million).
- All Shares to be offered are existing shares held by Tech Nova Investment – Sole Proprietorship L.L.C and Kryptonite Investments L.L.C (the “Selling Shareholders”), who reserve the right to amend the size of the Offering at any time before the end of the subscription period subject to applicable laws and the approval of the Securities and Commodities Authority (“SCA”) in the UAE.
- The Company expects to distribute a minimum dividend of AED 135 million with respect to each of its financial years ending 31 December 2024 and 2025 to all other shareholders (other than the Selling Shareholders), implying a dividend yield of c. 7.42% at the top of the price range and c. 7.14% at the bottom of the price range.
- The IPO subscription period starts today and is expected to close on 4 June 2024 for Individual Investors (First Tranche) and 5 June 2024 for Professional Investors (Second Tranche).
- The final offer price will be determined following the book-building process and is expected to be announced on 6 June 2024.
- Admission of shares to trading on the ADX is anticipated to occur on or around 12 June 2024.
- The Offering is compliant with Shariah principles, and the Internal Shariah Supervision Committee of First Abu Dhabi Bank PJSC has issued a pronouncement to this effect.
Geoffrey Alphonso, Chief Executive Officer of Alef Education, commented: “Our investment proposition has been incredibly well received by the market, with significant interest in our Offering since announcing our intention to float. With the opening of subscriptions, we are offering UAE and international investors the opportunity to participate in the growth of a leading and homegrown player in the education technology sector—an underrepresented sector across UAE capital markets. Building on our successful track record to date and leveraging the favourable market conditions and strong market opportunity, we are committed to driving further growth across our platform and delivering sustainable long-term shareholder value, supported by our robust dividend policy. Leveraging organic and inorganic means, we aim to super-serve our home market of the UAE, execute against our high-impact B2G strategy solidifying our status as a partner of choice and tap into the global B2B market to unlock further scale. We look forward to announcing the final offer price next week and are excited to welcome new shareholders as we embark on our next phase of growth.”
Offer Price Range Details
The Offer Price Range has been set at between AED 1.30 and AED 1.35 per Share, implying a market capitalisation at listing of between AED 9.10 billion (US$ 2.48 billion) and AED 9.45 billion (US$ 2.57 billion).
A total of 1.4 billion (1,400,000,000) Shares, each with a nominal value of AED 0.01, are available in the Offering, equivalent to 20% of the Group’s issued share capital, resulting in a total Offering size of between AED 1.82 billion (US$ 496 million) and AED 1.89 million (US$ 515 million). The final offer price is expected to be announced on 6 June 2024.
All Shares are existing shares being sold by the Selling Shareholders, Tech Nova Investment – Sole Proprietorship L.L.C and Kryptonite Investments L.L.C and the Company will not receive any proceeds from the Offering. The Selling Shareholders reserve the right to amend the size of the Offering and the size of any Tranche at any time prior to the end of the subscription period at their sole discretion, subject to the applicable laws of the UAE and the approval of the SCA in the UAE.
Following the Offering, and subject to the size of the Offering not being increased, Tech Nova Investment – Sole Proprietorship L.L.C and Kryptonite Investments L.L.C will hold shareholdings of 68% and 12%, respectively. Pursuant to an Underwriting Agreement entered into between the Company, the Selling Shareholders and the Joint Lead Managers, the shares held by the Selling Shareholders following the listing shall be subject to a lock-up from the date of the Underwriting Agreement up to and including 180 days from the listing, subject to certain terms and conditions.
Dividend Policy
Alef Education intends to maintain a dividend policy designed to maximise shareholder value and reflect its strong earnings potential and cash flow generation, while allowing it to retain sufficient capital to invest in its long-term growth (including strategic acquisitions).
Always subject to Board of Directors, general assembly approval, and factors detailed below, Alef Education:
- Intends to adopt a semi-annual dividend distribution policy to pay cash dividends after the Offering twice each financial year, with an initial payment of the first-half results being paid in the fourth quarter of that year and a second payment following second-half results being paid in the second quarter of the following calendar year.
- Expects to pay a minimum dividend payout ratio of 90% of the net profit generated for both financial years 2024 and 2025.
- Further, the Company intends to pay a target minimum dividend amount to investors equivalent to an annualised dividend of AED 135 million relating to the performance for the financial year ending 31 December 2024 and AED 135 million relating to the performance for the financial year ending 31 December 2025 (the targeted minimum dividend amount for the financial years ended 31 December 2024 and 2025, (the “Minimum Dividend Guaranteed Period”) (the "Target Minimum Dividend Amount").
- If, during the Minimum Dividend Guaranteed Period, the portion of the declared dividend to all shareholders (other than the Selling Shareholders) falls below the intended Target Minimum Dividend Amount, then the Selling Shareholders may, subject to not breaching AAOIFI Shariah standards, forgo their right to receive dividends to the extent necessary to pay the intended Target Minimum Dividend Amount to all other shareholders (other than the Selling Shareholders).
As such, the Offer Price Range implies a dividend yield of c. 7.42% at the top of the price range and c. 7.14% at the bottom of the price range for the financial years ending 31 December 2024 and 2025 to all other shareholders (other than the Selling Shareholders).
The Company’s ability to pay dividends is dependent on a number of factors, including the Company's cash requirements in support of achieving strategy in future periods, future financing capacity, levels of expected future profits and prevailing market conditions, among others.
Subscription Process and Details
As previously announced, the Offering is available to the following subscribers:
- To individual and other investors (“Individual Subscribers”) (as defined in the “UAE Prospectus”) as part of the First Tranche of the Offer, which will comprise 8% of the Offer Shares, representing 112,000,000 Shares.
- To professional investors (and other investors in a number of countries outside the United States of America, including in the UAE) as part of the Second Tranche of the Offer, which will comprise 92% of the Offer Shares, representing 1,288,000,000 Shares.
The IPO subscription period starts today and runs until 4 June 2024 for Individual Investors (First Tranche) and until 5 June 2024 for Professional Investors (Second Tranche).
Each subscriber in the First Tranche will be guaranteed a minimum allocation of up to 2,000 Shares, subject to the limits and conditions set out in the UAE Prospectus. The final minimum guaranteed allocation for each subscriber in the First Tranche shall be determined at the end of the subscription period based on the total number of subscribers in the First Tranche and the Final Offer Price. Shares in the First Tranche available for allocation in excess of the aggregate minimum guaranteed allocation shall be allocated on a pro-rata basis. The refunds of investment surplus to subscribers in the First Tranche is expected to occur on 11 June 2024.
The completion of the Offering and admission of the Shares to listing and trading on the Main Market of the ADX is currently expected to take place on or around 12 June 2024, subject to market conditions and obtaining relevant regulatory approvals in the UAE, including approval of Admission from the SCA.
The details of the Offering are available in the UAE Prospectus with respect to the First Tranche Offering and in the English-language International Offering Memorandum with respect to the Second Tranche Offering. The UAE Prospectus and the International Offering Memorandum are both available at www.alefipo.com.
Shariah Compliance
The Internal Shariah Supervision Committee of First Abu Dhabi Bank PJSC has issued a pronouncement confirming that, in their view, the Offering is compliant with Shariah principles. Investors may not rely on this pronouncement and should undertake their own due diligence to ensure that the Offering is Shariah-compliant for their own purposes.