Mubadala considers selling part of $1B stake in telco Du

Abu Dhabi sovereign wealth fund Mubadala Investment Co. is considering plans to sell at least part of its $1 billion stake in telecom operator Du, according to people familiar with the matter.

Firms including Emirates NBD, First Abu Dhabi Bank and Goldman Sachs Group Inc. have been lined up to advise on the deal, the people said, requesting anonymity as the information is confidential.

Mubadala has been weighing a sale for some time, but the talks are still at an early stage, the people said. No final decisions have been made on the size of the sale or its timing.

Mubadala currently holds about 10% of Du through a unit called Mamoura Diversified Global Holding. The fund last pared back its holding in the firm in 2019, selling a 10% stake — then valued at about $630 million — to the UAE’s federal wealth fund, Emirates Investment Authority.

The EIA is Du’s largest shareholder with a stake of just over 50%.

A sell-down by Mubadala would add further impetus to a small but growing market for follow-on equity offerings in the Middle East. Such deals are becoming more common across the Persian Gulf on the back of a four-year wave of initial public offerings.

For regional governments seeking to finance their economic transformation plans, follow-ons widen the options for portfolio companies beyond IPOs. Higher levels of free float also boost firms’ chances of inclusion in broader indexes such as MSCI, and help foster liquidity in domestic capital markets.

Abu Dhabi’s national oil company raised $2.8 billion by selling a stake in its gas unit in February and $900 million with a sell-down in Adnoc Drilling Co. last year. Saudi Arabia’s government raised about $12 billion by offloading a sliver of its stake in Aramco last year, while the kingdom’s wealth fund sold a $1 billion stake in a telecoms firm.

Du was part of an earlier wave of IPOs in the UAE and raised 2.4 billion dirhams ($650 million) in 2006 from a listing in Dubai. The firm announced its highest-ever dividend in February after reporting strong 2024 results. Bloomberg