Omani energy firm OQ SAOC plans to sell a 49% stake in its gas pipelines unit in a domestic initial public offering which could be the Gulf country’s biggest on record.
(Bloomberg) — Omani energy firm OQ SAOC plans to sell a 49% stake in its gas pipelines unit in a domestic initial public offering which could be the Gulf country’s biggest on record.
OQ will offer the stake in OQ Gas Networks SAOG through Oman Energy Trading Company Limited and Oman Oil Services Limited, according to a statement on Monday. The share sale could raise as much as $800 million, Bloomberg News has reported, which would make it a contender for Oman’s largest listing ever.
Trading in OQGN’s shares is expected to start in October.
OQGN is set to be the second IPO in Oman’s privatization program that’s aimed at boosting state coffers and expanding its bourse, similar to listing drives in Saudi Arabia and the United Arab Emirates which have raised billions of dollars in the last couple of years.
OQ floated its oil-drilling unit Abraj Energy Services SAOG in March, raising $244 million in what was Oman’s biggest listing in over a decade. Its shares have risen about 20% since.
OQ is an integrated energy firm with oil and gas exploration, production operations, refineries, a retail network and a large petrochemical business. OQGN holds a natural monopoly over the essential gas transportation infrastructure in Oman and has about 4,031 km (2,505 miles) of gas pipelines.
OQGN expects to pay dividends semi-annually, with a payment of 33 million rials ($85.7 million) for the first nine months of 2023 in January 2024, and the second distribution of 11 million rials for the last quarter of this year around April 2024, according to the statement.
It made a profit of 33.1 million rials on 85 million rials of revenue in the first half of this year, up from 23.4 million rials of profit for the same period in 2022.
Oman’s wealth fund said last year it was considering IPOs for two units of OQ as well as a manufacturing firm as the sultanate looks to catch up with a listings boom in the Gulf on the back of higher oil prices and investor inflows. Oman Telecommunications Co SAOG’s $748 million IPO in 2005 is currently the country’s largest, data compiled by Bloomberg show.
Bank Muscat SAOG, Bank of America Corp., and EFG Hermes have been appointed joint global coordinators on OQGN’s IPO.
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