OQ Gas Networks (OQGN), (under transformation), today announced its intention to proceed with an initial public offering (IPO) and listing on the Muscat Stock Exchange (MSX), which is expected to take place in October 2023. The IPO is subject to receiving the required regulatory approvals from the Capital Market Authority (CMA). OQGN’s planned listing will allow investors to gain exposure to the exclusive operator and owner of the NGTN.
The Selling Shareholders expect to sell up to 49% of the total issued share capital of OQGN, with the Company and the Selling Shareholders retaining the right to amend the size of the Offering at any time before the end of the subscription period at their sole discretion, subject to applicable laws and the approval of the CMA. Immediately following the Offering, a minimum of 51.0% shareholding will continue to be held by OQ.
Mansoor Al Abdali, Managing Director of OQGN, said: “OQGN, as the exclusive operator of the NGTN in Oman, provides critical infrastructure to deliver gas that supports the industries and economy of Oman. This listing, which we are proud to be conducting on the Muscat Stock Exchange, will allow us to move the company into the next chapter of growth. The core focus of OQGN will remain unchanged, focusing on the delivery of vital resources supporting the growth of our customers and the Sultanate of Oman. Our work is underlined by a commitment to reliability, efficiency, safety and sustainability. Together with our partners at OQ and OIA, we look forward to the listing and are excited by the opportunities it brings – to our customers, our investors, our employees, and the people of Oman”.
Talal Al Awfi, OQ Group CEO and OQGN Chairman, said: “The IPO of OQGN is part of a broader divestment programme envisioned by the government and being implemented by Oman Investment Authority (OIA); the integrated sovereign wealth fund of the Sultanate of Oman. This marquee offering is an opportunity for Omani and international investors to participate in Oman Vision 2040, the long-term national development plan that aims to make Oman a prosperous, competitive and sustainable nation and to rapidly diversify its economy. The listing of OQGN, which owns and operates critical gas transportation infrastructure in Oman, is in line with this ambition while enriching the dynamically developing Omani stock market. We look forward to the listing on the MSX and are excited for what’s to come”.
The Offering is being offered to eligible investors in Oman and qualified institutional and other investors in a number of countries (the “Category I Investors”) and retail investors in Oman (“Category II Investors”). Further information on the eligibility requirements for participation in the Offering will be available in the Offering Document upon its publication.
The Subscription period for Category I and Category II investors is expected to commence in September 2023, after receiving the required approval from the CMA.
Admission of the Shares to trading on the MSX is expected in October 2023.
OQGN intends to adopt a semi-annual dividend distribution policy to pay dividends in cash after the Offer.
The Company expects to pay the first dividend distribution of RO 33 million for the first nine months of 2023 around January 2024. It also expects to pay the second dividend distribution of RO 11 million for the last three months of 2023 around April 2024.
OQGN currently expects to pay a dividend in respect of the fiscal year ending 31 December 2024, which will be the higher of 90% of the Company’s profit for the year ending 31 December 2024 or a 5% increase on the aggregate dividends paid for 2023.
For 2025, the Company expects to pay a dividend, which will be the higher of 90% of the profit for the year ending 31 December 2025 or a 5% increase on the dividends paid for 2024.
OQGN’s ability to pay dividends is dependent on a number of factors, including the availability of distributable reserves, its capital expenditure plans and other cash requirements in future periods, as well as the necessary approvals.
OQGN transports gas, through the NGTN on behalf of the Shipper, which buys gas from gas producers and sells it to gas consumers. At present, there is only one Shipper, IGC, although additional Shippers may be introduced in the future. In 2022, the Company transported 39.4 BCM of gas, from six gas producers to a diverse consumer base of approximately 130 gas consumers through approximately 4,031 kms of gas pipelines, supported by three compressor stations and 25 gas supply stations, providing uninterrupted gas supply in 2022.
In 2022, the Company earned income of RO 160.4 million. For the six months ended 30 June 2023, the Company earned income of RO 85.0 million.
In June 2023, the Company entered into refinancing facilities in order to improve the Company’s long-term capital structure.
Shariyah Review Bureau (SRB) has issued a pronouncement confirming that, in its view, based on the circumstances as at the date of this pronouncement, the Offering is Sharia compliant in accordance with pertinent Sharia principles of the AAOIFI Sharia standards as of the date of this statement.
Source: Oman News Agency
