Oman’s OQ to offer 49% stake in methanol, ammonia unit

Oman state-owned energy giant OQ said on Monday that it plans to sell a 49 per cent stake in its methanol and liquefied petroleum gas (LPG) unit in an initial public offering (IPO) on the local bourse, days after it raised a record $2bn from an IPO of its exploration and production business.

OQ said the listing of OQ Base Industries (OQBI) is part of its privatisation programme. The state-owned energy group is supporting Oman, a small non-OPEC oil producer, in diversifying its economy and cutting its debt.

The energy giant said the listing would allow investors to invest in Oman’s only production company of methanol, ammonia and LPG products. The offer period for OQBI’s IPO will start in November and its shares will begin trading on the Muscat Stock Exchange (MSX) in December.

Salalah-based OQBI has a combined capacity of 1.8 million metric tons per annum of production (mtpa), with methanol accounting for around 1.1 mtpa of the total.

The firm reported revenue of $510m and an adjusted EBITDA margin of 43.1 per cent for the year ended December 2023. It expects to pay a dividend of about $63.6m (OMR24.5m) for the first nine months of 2024 by January and a second tranche of about OMR8.2m by April.

Ashraf Hamed Al Mamari, group CEO of OQ, said OQBI’s IPO follows the success of three previous offerings, which drew high interest from investors.

“The strong demand has been fuelled by our solid financial performance, operational strength, and attractive dividend policy,” said Al Mamari.

The group appointed Bank Dhofar, Bank Muscat and Morgan Stanley & Co as joint global coordinators and bookrunners for the IPO.

Meanwhile, PwC said the outlook for the GCC IPO market remains buoyant, with a healthy IPO pipeline of companies from a diverse range of sectors busy preparing for their upcoming listings across the region.

The Middle East region’s top grocer, Lulu Retail Holding, increased the number of shares on offer in its Abu Dhabi IPO amid high demand and now targets raising as much as $1.72bn in what would be the UAE’s biggest listing of the year.

The listing activity is expected to continue in the final quarter. Delivery Hero is preparing to list its Middle Eastern food delivery unit, Talabat, in Dubai, while Alpha Data is considering a share sale in Abu Dhabi. Similarly, Saudi Arabia’s capital markets authority recently green-lit IPOs for cosmetics retailer Nice One and hospital operator Almoosa.

Read: Delivery Hero prepares IPO of Talabat on Dubai bourse