(Bloomberg) – Omani energy company OQ SAOC plans to sell up to 49% of its oil drilling unit Abraj Energy Services SAOC in an IPO, kickstarting the Sultanate’s push to join a stock market boom sweeping the Middle East.
Most read by Bloomberg
The subscription period begins in February and the shares are expected to start trading on the Muscat Stock Exchange in March, according to a statement. The IPO could raise as much as $500 million, Bloomberg News reported in September.
Oman joins its energy-rich Gulf neighbors – notably the United Arab Emirates and Saudi Arabia – in selling off assets to fund the diversification of their economies and open their stock markets to more international investors. The effort made 2022 a stellar year for IPOs in the region, braving a global slump in stock sales caused by fears of high inflation and interest rate hikes.
More on Abraj’s IPO:
-
The institutional offering will represent a maximum of 85% of the total offering and is aimed at eligible investors in Oman and international investors outside the US.
-
Retail supply accounts for at least 15% of total supply
-
In 2023, Abraj Energy intends to pay a dividend of 85% of its 2022 earnings.
-
Ahli Bank of Oman, EFG Hermes and National Bank of Oman are the joint global coordinators of the IPO.
-
“We believe the company’s future is very bright, not least because it is already pre-qualified in four countries for a range of services and is setting the stage for international expansion focused on growth and shareholder value,” Chief Executive Officer Saif Al Hamhami.
The Oman Investment Authority announced in December that it plans to raise more than US$1.3 billion by exiting investments in eight sectors this year, from energy to aviation, tourism to communications and information technology. OQ is also planning an IPO for its gas pipeline unit that could raise up to $800 million, Bloomberg News reported in September.
The story goes on
Nonetheless, Oman still has a long way to go on its road to IPO. It hasn’t had a major listing since 2010, when telecom operator Nawras, now known as Ooredoo Oman, raised $475 million.
Oman and Bahrain are the only countries in the six-nation Gulf Cooperation Council not classified by MSCI Inc. as emerging markets. The market capitalization of the Omani Stock Exchange is about $22 billion, according to data from Bloomberg.
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. Its Treasury Department said in December it estimated the country would increase oil production by more than 10% this year to 1.175 million barrels a day.
(Updates with CEO comment in fourth bullet)
Most Read by Bloomberg Businessweek
©2023 Bloomberg LP
Comments are closed.