Oman’s OQ Gas Networks to list 49% stake on Muscat Stock Exchange

Oman’s OQ Gas Networks (OQGN), the pipelines business of state oil giant OQ, said it plans to sell a 49 per cent stake through an initial public offering (IPO) on the Muscat Stock Exchange (MSX), in what is expected to be the biggest offering in the sultanate in almost two decades.

The company is offering the shares in two tranches — institutional investors and retail investors— with a subscription period expected to commence this month, after receiving regulatory approval from the Capital Market Authority. The shares will debut on the MSX in October.

“This listing, which we are proud to be conducting on the Muscat Stock Exchange, will allow us to move the company into the next chapter of growth,” Mansoor Al Abdali, managing director of Gas Networks said. The company provides critical infrastructure to deliver gas that supports the industries and economy of Oman.

In an emailed statement, OQ Gas Networks said the listing will provide investors with access to growth in the company that holds a “natural monopoly” over essential gas transportation in Oman.

The selling shareholders reserve the right to amend the size of the listing at any time before the end of the subscription period. OQ will retain a minimum of 51 per cent shareholding in OQ Gas Networks after the IPO. Keywords: OQ Gas Networks, IPO, Muscat Stock Exchange, Oman 

“The IPO of OQGN is part of a broader divestment programme envisioned by the government and being implemented by Oman Investment Authority (OIA),” said Talal Al Awfi, OQ Group CEO and OQGN chairman.

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.

OQ Gas Networks said its ability to pay dividends is dependent on several factors, including the availability of distributable reserves, its capital expenditure plans and receiving the necessary approvals.

OQ Gas Networks joins GCC IPO frenzy

Meanwhile, OQ Gas Networks’ IPO follows the listing of OQ’s oil drilling business, Abraj Energy Services, which raised $244m by selling a 49 per cent stake in Muscat in March.

PwC said the listing of Abraj Energy is a manifestation of the OIA’s initiatives that are aimed at encouraging IPO activities on the local exchange by privatising government investments.

The GCC region is experiencing a favourable climate for IPO issuances, and indications point to this trend continuing in the medium term, as the implementation of capital markets reforms stimulate listing activity are starting to yield results.

Oman follows Abu Dhabi and Saudi Arabia in looking at sales of stakes in energy assets, capitalising on a rebound in crude prices to attract foreign investors and boost interest on their respective exchanges.

Read: GCC stock markets are hitting record highs. Here’s why