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Oman’s OQ Tees Up Methanol Unit IPO Weeks After $2 Billion Deal

(Bloomberg) -- Oman’s state energy company OQ SAOC plans to sell up to 49% of its methanol and liquefied petroleum gas unit in an initial public offering, extending the boom of new share sales in the Middle East. 

Regional and global investors have expressed interest to participate in OQ Base Industries SAOG’s offering, Chief Executive Officer Khalid Khalfan Al Asmi said in an interview. “The discussion is in a very active stage,” he said, without disclosing further details. 

The business is expected to be valued between $1 billion and $1.5 billion, Bloomberg News has previously reported. The deal comes after OQ raised a record $2 billion from an IPO of its exploration and production business. OQ Exploration & Production SOAG’s shares declined in its debut last week, a rarity in the region, and are trading below the offer price. 

The OQEP offer saw aggregate demand of $5.4 billion that indicated continued interest in Gulf deals despite escalating violence in the wider region. Still, it was lower than the $10.4 billion worth of orders for OQ Gas Networks SAOG’s $748.6-million IPO last year.

The Middle East has seen a flurry of listings this year that have raised around $8 billion. Oman, too, is in the midst of an ambitious privatization drive with around 30 assets in the pipeline, including logistics company Asyad Group and Oman Electricity Transmission Co. 

The offer period for OQBI’s IPO will start in November and its shares will begin trading on the Muscat Stock Exchange in December. “The intended listing would provide investors with the opportunity to invest in Oman’s only production company of methanol, ammonia and LPG products,” it said in a statement Monday. 

The firm reported revenue of $510 million and an adjusted EBITDA margin of 43.1% for the year ended December 2023. It expects to pay a dividend of about 24.5 million rials ($63.6 million) for the first nine months of 2024 by January and a second tranche of about 8.2 million rials by April. 

For 2025 and 2026, OQBI will pay at least 5% more in dividends compared to the previous year, the CEO said.

Morgan Stanley, Bank Dhofar and Bank Muscat have been named joint global coordinators, while Kamco Investment Co. and BSF Capital have been appointed as joint bookrunners.

(Updates with CEO’s comments in second and ninth paragraphs)

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