Dubai: Dubai's Union Coop confirmed plans to turn itself into a 'public joint-stock company', which the supermarket operator said will help maximise its financial resources. The company's shares are currently traded on the DFM, but only open to UAE National shareholders.
Being a publicly listed joint stock company will allow other investors to buy and sell Union Coop shares.
A transition into a public company can also help increase 'competitive capabilities', the retailer added in a statement. Union Coop has a sizeable presence in Dubai's supermarket category, helped by its network of established locations as well as new ones coming up. There are also community malls in its portfolio, which adds to its revenue stream.
There has also been market talk about other UAE-based retail entities making the move to go public.
Shareholders' benefit
The Union Coop stock will thus gain exposure with a wider group of investors and opens up the 'potential for higher long-term returns'. Currently, there is Spinneys that's trading on the DFM, while ADX recently welcomed LuLu Retail.
Being a public company will also allow Union Coop to 'expand into new geographic areas'.
Transitioning into a public company will help 'achieve strategic goals, including the development of its projects, expansion of reach, and improvement of services provided to shareholders, customers, shoppers, and the community'.
The decision to explore the possibility to convert into a 'PJSC' was taken at Union Coop's Board of Directors meeting.
"The shift will contribute to the local economy and enhance transparency and governance systems," said the statement. "If the transformation is realized, the cooperative will be subject to the laws and regulations governing public joint-stock companies, which are subject to strict regulatory oversight, thereby enhancing transparency and credibility in financial transactions and increasing shareholders' trust in the company’s operations."
What next?
Union Coop appointed Al-Tamimi Company to work on the transformation project, which will submit a study exploring what such a move would mean for the retailer's corporate structure. The study will include an evaluation of the legal and financial aspects, in addition to reviewing the legal regulations and systems. This will be 'presented to the competent authorities and the general assembly to make the final decision'.
