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OQ announces price range for IPO

Published by , Editorial Assistant
World Pipelines,

Oman's OQ Gas Networks (OQGN), the pipeline business of state oil giant OQ, has said it’s set the offer range for its initial public offering (IPO) and, if priced at the top end of the range, it could raise up to 297 million rials (US$772 million), according to Reuters.

In what could be Oman's largest IPO in almost two decades, OQGN said in a statement it plans to float about 2.12 billion shares, equivalent to up to 49% of its share capital and could have a total valuation of 606 million rials.

In following its neighbours Abu Dhabi and Saudi Arabia, Oman is looking to sell stakes in its energy assets, attracting foreign investors by capitalising on a rebound in crude oil prices.

OQGN, as the exclusive operator of Oman’s gas transport system, supplies natural gas to power plants, free zones, industrial clusters, LNG complexes and other customers. It operated a pipeline network that spanned nearly 4031km as of the end of 2022.

OQGN's statement indicated that the shares for institutional investors have been priced between a range of 131 and 140 Omani baisas per share, equating to 0.131 (US$0.34) and 0.140 rials (US$0.36) and for retail investors the price has been kept at 126 baisas per share.

The expected proceeds and valuation are slightly above earlier Reuters calculations as the retail discount is discretionary and is not factored into the official figures.

"We think that the IPO price seems affordable to the individual investors, not only the institutional," said Mazen Salhab, Chief Market Strategist, MENA, at BDSwiss.

Three anchor investors have already committed to taking 10% each of them offering at the top end of the range.

These investors are Saudi Omani Investment Company – a unit fully-owned by Saudi Arabia's Public Investment Fund – Falcon Investments – a subsidiary of the Qatar Investment Authority ¬– and Fluxys International.

OQ's oil drilling business, Abraj Energy Services, raised US$244 million with the sale of a 49% stake in March 2023.

The IPO subscription period is expected to begin end of September 2023, with shares expected to begin trading on the Muscat stock exchange on or around 24 October, after the final price has been revealed by OQGN on 12 October.

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