Muscat City Desalination plans share offer in third quarter

Muscat: Muscat City Desalination Company plans to float an Initial Public Offering (IPO) on the Muscat Securities Market (MSM) in the third quarter of this year, said senior official of the Capital Market Authority (CMA).
Muscat City Desalination Company (MCDC), which owns and operates the 42 million imperial gallons per day (MIGD) capacity -Al Ghubra independent water project, has to divest its shares in favour of the investing public as per an agreement with the Oman government.
The company, according to highly placed sources at the Capital Market Authority, has sought approval for floating shares on MSM.
MCDC, which started operation in February 2016, was jointly promoted by Malaysia’s Malakoff International, Sumitomo Corp of Japan and Cadagua of Spain.
The plant was established under a Build, Own and Operate scheme, which enables it to be operated beyond the Water Purchase Agreement term of 20 years, either by extending the agreement (if agreed by OPWP), or by selling the water into the market, which may exist by that time.
Reverse Osmosis technology
The plant is based on the Seawater Reverse Osmosis technology and is one of the largest operational desalination plants in Oman. The technology employed at the plant is a proven technology that has been implemented globally in numerous projects.
The company has an operation and maintenance agreement with Muscat City Operation and Maintenance Company, a company incorporated in the Sultanate of Oman, for the operation and maintenance of the plant.
Meanwhile, two insurance companies—Al Ahlia Insurance and Vision Insurance—have already floated their share offers, while three more insurance firms are expected to open their IPOs for subscription in August.
National Life and General Insurance, Oman and Qatar Insurance and Arabia Falcon Insurance are planning to open share offer subscriptions in August, according to reliable sources.
All insurance companies are offering 25 per cent of their paid-up capital to the investing public and institutions in a one-month subscription.
Al Ahlia Insurance had floated its OMR7.5 million IPO on July 4 at an offer price of 300 baisas per share.
In the IPO, 65 per cent of the offered shares have been reserved for small investors applying a minimum of 1,000 shares to a maximum of 250,000 shares, with the remaining 35 per cent of shares reserved for large investors applying for a minimum of 250,100 shares up to a maximum of 2,500,000 shares. The IPO represents an offer of 25 per cent of the share capital of the company.
Likewise, Vision Insurance had also opened its OMR4 million share offer at a price of 162 baisas per share on July 9.
The 25 million shares on offer constitute 25 per cent of the share capital of the company. Vision Insurance’s issued and paid-up share capital is OMR10 million, divided into 100 million shares with a nominal value of 100 baisas per share.
Although the Sultanate has 22 insurance companies (11 locally incorporated and 11 branch operations of foreign firms), only four companies—Dhofar Insurance, Oman United Insurance, Al Madina Takaful and Takaful Oman—are listed. Of these, Al Madina Takaful and Takaful Oman are Islamic insurance firms.