Air Arabia IPO subscription open to both UAE and non-UAE individual and institutional investors

The ten-day IPO will be open from March 18, 2007, until March 27, 2007.

The IPO is the largest offering in UAE history to date and will be open to both UAE and non-UAE nationals, including individual and institutional investors.

The total size of the offering is AED2,566,700,000 consisting of 2,566,700,000 shares, representing 55 per cent of the company's share capital, at an offer price of AED 1 per share, in addition to AED 0.02 in offering costs.

SHUAA Capital is the Lead Manager, Financial Advisor and Bookrunner for the IPO. The National Bank of Abu Dhabi has been appointed as the Lead Receiving Bank. In addition, investors will be able to subscribe at receiving banks both in the UAE and the GCC.

Receiving banks in the UAE are: National Bank of Abu Dhabi, Abu Dhabi Commercial Bank (ADCB), , Mashreqbank, Dubai Bank, Dubai Islamic Bank, Emirates Bank, First Gulf Bank, InvestBank, National Bank of Fujairah, National Bank of Umm Al Quwain, Sharjah Islamic Bank and Union National Bank.

Receiving banks across the GCC are: Ahli United Bank, Bahrain; Ahli Bank, Qatar; and National Bank of Oman, Oman.

Air Arabia plans to list its shares on the Dubai Financial Market.

Adel Ali, Chief Executive Officer, Air Arabia, said: "We encourage all investors to subscribe to Air Arabia's IPO and become a proud owner of shares of the most successful and exciting low-cost carrier in the region. By participating in this offering, investors will become personally involved in the growth of a business that is part of their own lifestyle."

He added: "The regional airline industry is witnessing robust growth. According to Airbus, passenger traffic in the Middle East will grow at an annual rate of 7.1 per cent through 2015, compared to a global average of 5.3 per cent. Over a 20-year period, from 2006-2025, Airbus predicts robust average growth of 6.2 per cent. We welcome investors to be part of this growth story."

The company intends to use the proceeds from the offering, in addition to bank financing, to expand the size of its existing fleet from nine to at least 34 aircraft by 2016. In addition, Air Arabia aims to expand its scope of operations and invest in the infrastructure associated to the fleet expansion.

Rody Yared, Head of Syndicate at SHUAA Capital, said: "We anticipate significant demand for Air Arabia's IPO due to the strength of the company's fundamentals and its strong financial footing, which will spur demand among both local and international institutional investors. Air Arabia also enjoys a strong brand name, which makes it an attractive investment across the various investor segments."

Subscription to the offered shares will be through four tranches. Tranche (I) is a retail tranche with a size of 250,000,000 shares, and is open to UAE and non-UAE resident subscribers with minimum subscriptions of 10,000 shares and maximum of 50,000 shares. Additional subscriptions in tranche (I) will be in multiples of 5,000 shares and allocation will be done on a pro-rata basis, with a minimum allocation of 1,000 shares per subscriber.

Tranche (II) is designated for high net worth individuals and institutional investors, both UAE and non-UAE, with a size of 2,116,700,000 shares. Subscriptions will start at 55,000 shares with any additional shares being multiples of 5,000 shares. Allocation will be done on a pro-rata basis.

Tranches (III) and (IV) are for 100,000,000 shares each, and they are slated respectively for current employees and retirees of the government of Sharjah, and management and employees of Air Arabia. Subscriptions in tranche (III) are for a minimum of 5,000 shares, while subscription in tranche (IV) will be for a minimum of 10,000 shares. All allocations will be done on a pro-rata basis, with a minimum guaranteed allocation of 5,000 shares for tranche (III) and 1,000 shares for tranche (IV).

Allocation of shares among subscribers will take place on April 8, 2007, with refunds for subscribers in the UAE on April 11, 2007, and for those in the GCC on April 14, 2007.