In the biggest initial public offering (IPO) Oman has seen recently, OQ Gas Networks (OQGN) has announced its intention to float 49% of the total issued share capital of OQGN and listing on the Muscat Stock Exchange (MSX).

 

The IPO could raise between $700 million and $800 million, a source with knowledge of the matter told Reuters, which would make it the largest since Oman Telecommunications raised OMR288 million ($748.09 million) through the sale of a 30% stake in 2005.

 

The listing is expected to take place in October 2023. This is subject to receiving the required regulatory approvals from the Capital Market Authority of the Sultanate of Oman (CMA). The company’s planned listing will allow investors to gain exposure to the exclusive operator and owner of the NGTN.

 

Immediately following the offering, a minimum of 51.0% shareholding will continue to be held by OQ.

 

Catergorisation

The offering is being offered to eligible investors in Oman and qualified institutional and other investors in a number of countries (the Category I Investors) and retail investors in Oman (Category II Investors). 

 

Category I Offer represents 70% of the total Offering (out of which 30% of the Offer Shares have been reserved for Anchor Investors) and will be made to eligible investors in Oman and qualified institutional and other investors in a number of countries.

 

Category II Offer represents 30% of the total offering for retail investors.

 

If the aggregate demand in Category II is less than 30% of the offer, then after full allocation to the Category II investors, the balance of the shares shall be made available to Category I investors, if there is oversubscription in Category I.

 

The subscription period for Category I and Category II investors is expected to commence in September, after receiving the required approval from the CMA.

 

Shariyah Review Bureau (SRB) has issued a pronouncement confirming that, in its view, based on the circumstances as at the date of this pronouncement, the Offering is Sharia compliant in accordance with pertinent Sharia principles of the AAOIFI Sharia standards as of the date of this statement.

 

Dividend policy

The company intends to adopt a semi-annual dividend distribution policy to pay dividends in cash after the offer. It expects to pay the first dividend distribution of OMR33 million ($86 million) for the first nine months of 2023 around January 2024 and expects to pay the second dividend distribution of OMR11 million for the last three months of 2023 around April 2024.

 

The company currently expects to pay a dividend in respect of the fiscal year ending December 31, 2024, which will be the higher of 90% of the Company’s profit for the year ending December 31, 2024 or a 5% increase on the aggregate dividends paid for 2023.

 

For 2025, the company expects to pay a dividend, which will be the higher of 90% of the profit for the year ending December 31, 2025 or a 5% increase on the dividends paid for 2024.

 

The company’s ability to pay dividends is dependent on a number of factors, including the availability of distributable reserves, its capital expenditure plans and other cash requirements in future periods, as well as the necessary approvals.

 

Next chapter of growth

Mansoor Al Abdali, Managing Director of OQGN, said: “OQGN, as the exclusive operator of the NGTN in Oman, provides critical infrastructure to deliver gas that supports the industries and economy of Oman. This listing, which we are proud to be conducting on the Muscat Stock Exchange, will allow us to move the company into the next chapter of growth. The core focus of OQGN will remain unchanged, focusing on the delivery of vital resources supporting the growth of our customers and the Sultanate of Oman. Our work is underlined by a commitment to reliability, efficiency, safety and sustainability. Together with our partners at OQ and OIA, we look forward to the listing and are excited by the opportunities it brings – to our customers, our investors, our employees, and the people of Oman.”

 

Talal Al Awfi, OQ Group CEO and OQGN Chairman, said: “The IPO of OQGN is part of a broader divestment programme envisioned by the government and being implemented by Oman Investment Authority (OIA) - the integrated sovereign wealth fund of the Sultanate of Oman. This marquee offering is an opportunity for Omani and international investors to participate in Oman’s Vision 2040, the long-term national development plan that aims to make Oman a prosperous, competitive and sustainable nation and to rapidly diversify its economy. The listing of OQGN, which owns and operates critical gas transportation infrastructure in Oman, is in line with this ambition while enriching the dynamically developing Omani stock market. We look forward to the listing on the MSX and are excited for what’s to come.”-- TradeArabia News Service