Tristar Transport, a global integrated liquid logistics solutions provider headquartered in Dubai, announced its intention to proceed with an initial public offering (IPO) on the Dubai Financial Market (DFM).
“I am proud to have witnessed the evolution of Tristar from a local road transportation business into a global world-class integrated energy logistics solutions provider serving blue-chip clients, with an offering that spans road and maritime transportation, specialized warehousing, fuel farms, and fuel supply operations,” Eugene Mayne, group CEO of Tristar said.
The group reported a 12.4% CAGR in operating cash flows between 2018 and 2020 and a consistent EBITDA margin between 20.1% to 22.8% in the years 2018 to 2020. In the year ended 31 December 2020, the group had a consolidated revenue of $453.4 million, and EBITDA of $103.6 million. This record is underpinned by a strong business model, operational excellence and rigorous financial management.
“Tristar’s IPO marks an exciting milestone in the Group’s story as we continue to grow, innovate and shape the future of the logistics industry,” Mayne added.
If all of the offer shares are allocated, the offer shares will represent up to 24% of the shares. The offering will comprise a primary issuance of 199,000,000 new shares in addition to a secondary offering of up to 88,760,000 existing shares by the existing shareholders. The existing shares are being offered by Agility Tristar SPV Ltd, Star Holdings Ltd, and Diamond SPV Limited, who currently own 65.12%, 19.61%, and 15.27% of the company’s shares respectively.
The completion of the offering is currently expected to take place in April 2021, subject to market conditions and obtaining relevant regulatory approvals in the UAE, including from the SCA. Furthermore, the offering is expected to be declared Sharia compliant, subject to confirmation by the Sharia Supervision Committee, on the date of the receipt of the net proceeds of the offering and upon the use of the proceeds to repay around AED 197 million in loans and payables due to related parties.
The EIA has the right to subscribe for 5% of the offer shares in accordance with the requirements of article 127 of the UAE Federal Law No. 2 for the year 2015 with regard to commercial companies, and its amendments. If the EIA does not exercise its preferential rights to apply for offer shares, then those offer shares will be made available.
For the dividend to be declared with respect to the year ending 31 December 2021, Tristar targets a pay-out ratio of 60-70% of net income. Tristar intends to pay $12.5 million dividend in the third quarter of 2021 as an interim dividend, with the remainder expected to be paid in the second quarter of 2022 as a final dividend. Thereafter, Tristar intends for dividends to be paid on a yearly basis at a pay-out ratio of up to 60% of net income.
Established in 1998 as a road transport service provider for the petroleum industry in the UAE, Tristar has evolved into a leading integrated energy logistics company serving a diversified customer base of “blue-chip” investment grade companies. The Group has operations in 21 countries and territories across three continents and has over 2,000 road transport assets and 35 maritime vessels, including the operation of 69 fuel farms and over 100 remote fuel sites, providing a wide spectrum of integrated service offerings.
