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Ominvest, ONIC Holding ink pact to explore possible merger
December 31, 2014 | 12:00 AM
ONIC Holding shares surged ahead 8.97 per cent to 316 baisas amid 4.2 million shares changing hand on the local bourse. However, Ominvest shares edged up by 0.97 per cent to 416 baisas. Times - file
 
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Muscat: Oman International Development and Investment Company (Ominvest) and Oman National Investment Corporation (ONIC) Holding have signed a memorandum of understanding (MoU) to explore the possibility of a merger.

If everything goes as per the plan, the merged entity will be one of the leading investment holding firms in the Sultanate. 

As per the initial understanding, ONIC shareholders will be allotted new voting shares to the extent of 33 per cent in Ominvest on merger.

"This percentage is a preliminary indication of value and may be subject to change following due diligence," Ominvest said in a disclosure statement.



Market sources said that a merger will be beneficial since big size of investment funds help to achieve economies of scale, which will also enhance efficiency by reducing cost for managing investments. 

ONIC Holding shares surged ahead 8.97 per cent to 316 baisas amid 4.2 million shares changing hand on the local bourse. However, Ominvest shares edged up by 0.97 per cent to 416 baisas on a volume of 1.02 million shares.

Ominvest, which has a 51 per cent stake in Oman Arab Bank, has holdings in several companies, including National Finance Company, Modern Steel Mills, National Detergent, National Biscuits Industries and Salalah Resorts. Ominvest also has interest in real estate sector.

ONIC Holding has stakes in National Life and General Insurance, Al Ahlia Insurance, International General Insurance Holdings, Oman Orix Leasing Company and Oman Chlorine.

A binding merger agreement will be negotiated and finalised, subject to completion of mutually satisfactory due diligence, the statement added. 

The initial understanding as per the MoU is that ONIC's shareholders will be allotted such number of new voting shares in the capital of Ominvest as equates to a post-merger 33 per cent shareholding in Ominvest.
 
"As we are only at the early stages of negotiations and due to confidentiality obligations only limited information can be disclosed." The merger will be subject to approvals from the respective board of directors and shareholders and all necessary legal, regulatory, and other approvals including approvals required from the Central Bank of Oman, Capital Market Authority, the Ministry of Commerce and Industry and other relevant authorities.

To contact this reporter: [email protected]


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