EGA may consider an IPO in 2017

According to sources, Emirates Global Aluminium (EGA), the largest aluminium producer in the Middle East is considering an initial public offering (IPO) to sell shares after the recovery in global commodity prices.

The unnamed source said that the UAE based company is seeking advisers for a potential initial public offering on the local stock exchange in this year.  However, there has been no official confirmation from EGA which is jointly owned by Abu Dhabi’s sovereign fund Mubadala Investment Co. and the Investment Corp. of Dubai on this matter.

IPOs in the Middle East are expected to have a revival as the GCC countries, including the UAE are shifting their focus towards other commodities than on oil. Saudi Arabia, the largest of the Gulf Arab economies is also planning for what could be the largest-ever IPO with the listing of Saudi Arabian Oil Co. According to Bloomberg data, companies in the Middle East raised just $1.4 billion from listings last year, compared with $2.9 billion in 2015.

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EGA’s profit rose about 10 per cent to 2.1 billion dirhams (US$572 million) in 2016 on record production. Aluminium production jumped 4.2 per cent to a record 2.5 million tons, making the UAE the fourth-biggest aluminium producer in the world. EGA is the largest industrial firm in the UAE outside of the oil and gas sector. The company is also building a bauxite mine in Guinea and an alumina smelter in Abu Dhabi to secure bauxite and alumina.

Investors are returning to the commodities sector after the recovery in commodity market. Notably, aluminium gained 15 per cent in 2017.