Muscat: Muscat City Desalination Company (MCDC), which owns the Ghubrah Independent Water Plant, plans to offer 35 per cent of its share capital in an initial public offering by mid-November.
As per the project founders’ agreement, the promoters are required to offer 35 per cent of their share capital to the public through an IPO. Accordingly, 54.44 million shares are on offer to the public through listing on the Muscat Securities Market. Bank Muscat is the financial advisor and issue manager for the IPO exercise.
Promoted by global leaders with vast experience in the water industry, Malakoff International (Malaysia), Sumitomo Corporation (Japan) and Cadagua S.A. (Spain), MCDC is the owner of Oman’s largest water plant contributing to 24 per cent of total water capacity in the Interconnected Zone. MCDC owned plant with proven desalination technology is a strategic asset located in Muscat. MCDC has long term contracted water purchase agreement until 2034 with government owned Oman Power & Water Procurement Company, ensuring stable and predictable cash flows.
On the back of this contracted water purchase agreement, MCDC plans to offer an attractive dividend yield to IPO investors, further details of which would be shared by the company upon obtaining the final approvals from Capital Market Authority.
MCDC is a proud player in Oman’s utility industry and contributing to the wellbeing of its residents by providing potable water.
Oman’s water demand has been growing by about 2– 3 per cent per annum, and has been notably increasing in the metropolitan area centered on Muscat.
To meet the increasing needs, the government launched a competitive bidding process in 2012 for multiple IWPs (Independent Water Projects). Following their successful bid, its shareholders incorporated MCDC to undertake the project. The plant has now successfully completed a year of production since February 19, 2016.
Malakoff Corporation Berhad (Malakoff), headquartered in Kuala Lumpur, is the leading and largest Independent Power Producer (IPP) in Malaysia.
Sumitomo Corporation is one of the leading general trading and investment firms in Japan developing a multifaceted business on a global scale to respond to the diverse needs of customers
Cadagua with more than 45 years of experience in water sector, is well known in Spain and abroad as a pioneer and leading company in the field of engineering and construction of water, wastewater treatment and desalination plants.
“This is a very exciting phase for MCDC. The company’s plant, Ghubrah IWP, has been successfully securing the water needs of Muscat and its residents for over a year. The IPO is a unique opportunity both as an investment in the Sultanate’s largest operating desalination plant, and in an essential commodity that is a part of everyday life,” said Subrina Thiagarajah, CEO of MCDC.
The plant provides 24 per cent of the total water capacity of the Interconnected Zone and its unique location at the heart of the city, combined with proven technology, an expert team and good availability, helps the company deliver uninterrupted water supply with minimum outages. The plant has been built with a total investment of OMR103 million, with a total capacity output to deliver 42 million gallons of potable water every day.
“MCDC, with the Ghubrah IWP, makes a valuable contribution to Muscat and Oman, through the provision of water to the people and industries. IPOs in the water sector in Oman have been a rare opportunity, but have a proven track record, with strong demand and growth projections. The MCDC IPO offers a unique opportunity for a diversified investment in an industry that is shaping a young and modern metropolis,” added Thiagarajah.