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OQ seeks to raise $490m from downstream products unit IPO

18 November 2024

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Omani state energy conglomerate OQ Group has set a share price range of RO0.106-0.111 ($0.275-0.288) for the upcoming initial public offering (IPO) of its subsidiary OQ Base Industries (OQBI), a producer of methanol, ammonia and liquefied petroleum gas (LPG).

OQ Group previously announced it plans to float 1,695,150,517 shares, or up to 49% of OQBI’s total issued share capital, in the planned IPO on the Muscat Stock Exchange (MSX).

This implies that the parent company has valued OQBI at around $1bn, and seeks to raise $490m from the IPO, which, it said, is expected to take place on 15 December.

The subscription period for institutional investors begins on 24 November and ends on 1 December. Institutional investors have been allocated 60% of the shares in the IPO, of which anchor investors have been assigned 30% of the offering.

OQ Group said it has secured four anchor investors for the OQBI IPO, who have committed to purchasing 7.5% of the shares each. The anchor investors are Falcon Investments, Gulf Investment Corporation, Saudi Omani Investment Company and the Social Protection Fund.

The subscription period for retail investors, who have been allocated 40% of the offering, starts on 28 November.

OQ Group said it owns 100% of OQBI’s capital directly and through its subsidiaries, Takamul Investment Company and OQ Salalah Industries Company.

This will be the fourth IPO of an OQ Group subsidiary. The state energy enterprise completed the stock listing of two businesses – onshore oil and gas drilling company Abraj Energy Services and midstream firm OQ Gas Networks – in March and October 2023, respectively. 

As recently as 28 October, shares of OQ Exploration & Production started trading on MSX following an IPO from which the parent entity earned total proceeds of about $2bn by floating 49% of shares – making it the largest stock listing exercise in Oman to date.

OQ Group said Bank Dhofar and Bank Muscat, along with New York-based Morgan Stanley, have been appointed as joint global coordinators, with the local banks also acting as issue managers. In addition, Kamco Investment Company and BSF Capital have been appointed as joint bookrunners.

OQ Base Industries

OQBI is the only producer of methanol, ammonia and LPG products – such as propane, butane, condensate and cooking gas – in the sultanate.

Based in the Salalah Free Zone in southern Oman, the company is active throughout the natural gas value chain, operating three plants with a combined nameplate production capacity of 1.8 million tonnes a year.

OQBI’s revenues last year reached $510m, while its adjusted earnings before interest, taxes, depreciation and amortisation margin was 43.1%.

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Indrajit Sen

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