OQ Gas Networks (OQGN), the pipeline sector of Oman’s state oil company OQ, is planning an initial public offering (IPO) aiming to raise up to OMR297 million ($771 million). The subscription for the IPO is set to open next week, as announced by the company on Monday.
The IPO, which could be the largest listing in Oman’s history, will see OQ selling approximately 2 billion shares or a 49% stake in OQGN. The price range for the IPO has been set at 131 to 140 baisas per share, potentially valuing the company at up to OMR606 million ($1.57 billion), according to a statement on the Capital Market Authority’s website on Sunday.
The IPO has received irrevocable commitments from three anchor investors: the Saudi Omani Investment Company, wholly owned by Saudi Arabia’s Public Investment Fund; Falcon Investments, a subsidiary of Qatar Investment Authority; and Fluxys International SA/NV. These investors have collectively committed OMR89,124,240 ($231,493,529) to the IPO at a purchase price of Bzs140 per share.
The subscription period for institutional investors is scheduled from September 26 to October 9, while retail investors can subscribe until October 5. The company expects the IPO to be listed for trading on the Muscat Stock Exchange (MSX) on October 24, 2023.
The offering will be conducted as approved by Oman’s Capital Market Authority (CMA), which regulates and develops Oman’s financial markets. The CMA has also approved the IPO prospectus.
Following the offering, OQ will retain a minimum of 51% shareholding in OQGN. The company and selling shareholders reserve the right to amend the size of the offering at any time before the end of the subscription period, subject to applicable laws and CMA approval.
The shares sold by the selling shareholders are existing ordinary shares, and OQGN will not receive any proceeds from the sale. All offering expenses will be borne by the selling shareholders.
Bank Muscat, BofA Securities and EFG-Hermes UAE Limited have been appointed as joint global coordinators for the IPO, with Bank Muscat also acting as issue manager.
OQGN is set to be the second IPO from its parent company OQ as part of Oman’s privatisation programme. The company is an exclusive operator of gas transportation network in Oman and provides critical infrastructure for both domestic and international partners. In March, OQ floated its oil-drilling unit Abraj Energy Services after raising $244 million in what was Oman’s biggest listing in over a decade.
OQGN reported a 41% rise in its first-half profit to OMR33.1 million ($86 million) as total income grew 16.5% to OMR85 million ($221 million). Last year, the company transported 39.4 billion cubic meters of gas from six producers to about 130 consumers through 4,031km of pipelines.
The completion of the offering and admission is subject to market conditions and obtaining all necessary regulatory approvals, according to a statement.