MUSCAT: Two leading independent power producers — Al Batinah Power Company and Al Suwadi Power Company — are simultaneously opening for subscription their OMR62.71 million worth of initial public offerings (IPOs) on May 11.
The share offers of 35 per cent each of the respective company's share capital to the public are in line with an obligation to offer shares within a stipulated period after starting operation. Unlike Oman Telecommunications' recent public offer, the share offers of these two firms are open to both foreign and local retail and institutional investors.
Accordingly, Al Batinah Power, which owns Sohar 2 power project, is offering 236.21 million existing shares and Al Suwadi Power, which owns the Barka 3 power project, plans to offer 250.04 million existing shares through listing on the Muscat Securities Market (MSM).
According to earlier reports, Al Batinah's offer price is 128 baisas, while Al Suwadi Power is offering the shares at 130 baisas per share.
Bank Muscat's investment banking division is the financial advisor and the sole issue manager for the share offer, which closes subscription on June 9.
A very exciting phase
"This is a very exciting phase for our two companies. Now that Sohar 2 and Barka 3 have been successfully contributing to Oman's power supply for over a year, we are delighted to offer the public an opportunity to participate in our shared future commercial success.
According to the Oman Power & Water Procurement Company (OPWP), which is the sole off-taker of the power, Al Suwadi Power and Al Batinah Power are together expected to play a major role in meeting the Sultanate's growing power demand for many years to come.
These IPOs are a unique opportunity for a combined investment in the Sultanate's largest and most efficient power plants in operation," Jurgen De Vyt, chief executive officer of Al Batinah Power and Przemek Lupa, chief executive officer of Al Suwadi Power, said in a joint statement.
Sohar 2 and Barka 3 were officially inaugurated on March 24 and 26, respectively. The ceremonies marked an important milestone in the journey of the two power companies, which together constitute a total investment of $1.7 billion, and a total installed capacity of 1,490-mega watts, representing about 27 per cent of Oman's main interconnected system's total current contracted power capacity.
The strengths of these two power producers include largest and most efficient power plants in operation, power purchase contracted with the government until 2028, stable and predictable cash flows, resilient to economic downturns and strong and committed founding shareholders with an established track record in Oman.
"Sohar 2 and Barka 3 indeed make a valuable contribution to Oman through the provision of power to the people and industries of the Sultanate. The power sector in Oman has a proven track record and, with a strong demand growth, has a bright future ahead. These concurrent power IPOs offer a rare opportunity for a diversified investment in a nation-building industry," noted Hadi Said Humaid Al Harthy, member of the board of Al Batinah Power.
Both companies are owned by a consortium comprising GDF Suez, Suhail Bahwan Group, Japan's Sojitz Corporation and Shikoku Electric Power Co and Oman's Public Authority for Social Insurance.