(Bloomberg) – Oman’s OQ SAOC plans to raise up to $244 million from the IPO of its oil drilling unit and has brought in Saudi Arabia’s wealth fund as an anchor investor.
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Supported by a rise in energy prices, Persian Gulf governments have listed assets to fund the diversification of their economies and open their stock markets to more international investors.
Three subsidiaries of state-owned energy company OQ are selling 49% of Abraj Energy Services SAOC — or just over 377 million shares — at 242 baizas to 249 baizas apiece, according to a statement. Retail investors receive a discounted rate of 224 Baizas.
Anchor investors will subscribe for 40% of the shares at the maximum price. The Saudi Omani Investment Company, a unit of Riyadh’s Public Investment Fund, will take 20%, while Royal Court Affairs and Schlumberger Oman & Co will each take 10%.
Largest since 2010
Abraj Energy will be Oman’s biggest IPO since 2010 when telecom operator Nawras, now known as Ooredoo Oman, raised $475 million, data compiled by Bloomberg shows.
Abraj Energy is taking orders from institutional investors from February 20th to March 2nd, while private buyers can bid until March 1st. Final prices will be announced on March 6th and trading in the shares is scheduled to begin on March 14th.
Oman joins the Gulf stock market boom, which has been mostly confined to Saudi Arabia and the United Arab Emirates. Last year was a glittering 12 month for the Middle East, with IPOs raising nearly $23 billion.
More Oman sales
The Oman Investment Authority announced in December that it plans to raise more than $1.3 billion this year through asset sales across eight sectors, including energy, aviation, tourism and communications. OQ is also planning an IPO for its gas pipeline unit and could raise as much as $800 million, Bloomberg News reported in September.
The story goes on
Abraj Energy said it intends to pay a dividend of 15.4 million riyals this year for 2022. In 2024 and 2025, it will pay out 85% of the prior year’s net income as a dividend or increase the payout by 6%, whichever is higher.
Oman pumps around 1 million barrels of oil per day. While not a member of the Organization of Petroleum Exporting Countries, it is part of the broader OPEC+ alliance. The country posted a budget surplus in the first half of 2022, driven by higher oil prices, which have eased recently.
Ahli Bank of Oman, EFG Hermes and National Bank of Oman are global coordinators for the IPO.
(Company corrects dividend policy in paragraph 9)
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