Oman’s OQ Gas Networks seeks to raise up to $771m from IPO

Oman’s OQ Gas Networks (OQGN) has started taking investor orders for its planned initial public offering (IPO), which is aimed at raising as much as $771m (OMR297m), in what is expected to be the biggest offering in the sultanate in almost two decades.

State-owned energy firm OQ set the price range for the IPO of OQ Gas Networks at 131 baisas to 140 baisas per share. The indicative price implies a market valuation of as much as OMR606m.

“We are confident in our position as the exclusive operator of the gas transportation network in Oman and in our ability to provide critical infrastructure for both our domestic and international partners,” said Mansoor Al Abdali, managing director of OQGN.

“Since announcing our intention to float on the Muscat Stock Exchange (MSX), we are pleased to see our strong position and performance reflected by significant interest from investors including our three, globally renowned, anchor investors.”

The company is offering the shares in two tranches — institutional investors and retail investors— between September 26 and October 5. OQ Gas Networks is expected to debut on the MSX on October 24.

The institutional investor tranche represents 40 per cent of the offering while the retail portion accounts for 30 per cent.

OQ Gas Networks’ IPO drew in three cornerstone investors, including Saudi Omani Investment Company, a unit fully owned by Saudi Arabia’s Public Investment Fund, Falcon Investments, a unit of Qatar Investment Authority and Fluxys International, the company said in a statement.

The cornerstone investors are each taking 10 per cent of the offer. “The company’s high cash flow visibility, underpinned by a robust regulatory environment and experienced leadership team were critical in determining our investment in OQGN,” said Muteb Al Shathri, acting CEO of the Saudi Omani Investment Company.

Bank Muscat, BofA Securities, and EFG Hermes have been appointed joint global coordinators of the deal.

OQ Gas Networks joins GCC IPO pipeline

OQ Gas Networks is set to be the second IPO in Oman’s privatisation programme that is aimed at boosting state coffers and expanding MSX. OQ’s oil drilling business, Abraj Energy Services, raised $244m by selling a 49 per cent stake in Muscat in March.

PwC said the listings in Oman are a manifestation of the initiatives being implemented by the country’s wealth fund to encourage IPO activities on the local exchange by privatising government investments.

The company plans to pay the first dividend of OMR33m for the first nine months of 2023 in January 2024 and the second dividend of OMR11m for the last three months of 2023 in April 2024.

For 2025, OQ Gas Networks expects to pay a dividend, which will be around 90 per cent of the profit for the year ending December 31, 2025, or a 5 per cent increase on the dividends paid for 2024.

The company plans to pay a semi-annual dividend in cash to investors after the offering.

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