Dubai-based utilities company Empower has shelved plans for a share sale through an Initial Public Offering (IPO) due to adverse market conditions, triggered by a consistent slide in the oil prices.

“Empower is a company that must go public… we have studied this, we came up with the result that we will IPO but the market conditions are not encouraging,” Reuters news agency quoted Empower chief executive Ahmed bin Shafar as saying at a press conference. “We are freezing the decision until we see the right time.”

Dubai, the trading and commercial hub of the Gulf region, doesn’t rely on sale of hydrocarbons to drive its economy, however, its tourism and commercial sectors feed on investments from other GCC countries. The oil has lost about 70 per cent of its value since the mid-2014, souring investor sentiment and forcing stock market slides across the region. Dubai Financial Market (DFM), which is dominated by banks and real estate companies, has fallen about 40 per cent from a 2014 peak.

Empower reported an annual net profit of AED516m ($141m) in 2015, up 27 per cent year-on-year. Revenue rose 12 per cent to AED1.7bn.

Shafar see Empower’s profit this year to reach AED600m and the company’s revenue could reach AED1.8bn.

Funding Plans

The company, a joint venture between Dubai Electricity and Water Authority (Dewa) and Dubai Technology and Media Free Zone (Tecom), needs AED1.2bn in new funding to pay for projects under construction, according to Shafar. Empower plans to raise 80 per cent of that amount from banks and the rest from company’s own balance sheet. The company is already in talks with local and international banks to secure financing. Its current liabilities total AED1.5bn after it paid off AED580m of debt last year.

The company has halted plans to expand into Qatar and Saudi Arabia after the drop in oil prices led to state spending cutbacks in those countries.