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Oman Arab Bank to advise Al Maha’s proposed 20m share offer


The proceeds of the IPO will go to the stakeholders who divest their holding. Photo — Times file

Muscat: Oman Arab Bank's (OAB) investment banking division is advising Al Maha Ceramics on its proposed initial public offering of 20 million shares.

Al Maha has already sought approval from Capital Market Authority (CMA) for its IPO, which is priced at 397 baisas per share, which include 295 baisas premium and two baisa issue expenses.

The company is planning to divest 40 per cent of its OMR5 million paid-up capital and the share offer of OMR7.94 million is expected to be floated in June.

"We are expecting the issue to be floated by next month, depending on an approval from CMA. We have already applied for a CMA approval and the draft prospectus has been submitted," a source further said.

Al Maha stakeholders are planning to divest their holding in favour of investing public and the proceeds of the IPO will go to the stakeholders who divest their holdings.

Al Anwar Holding is the majority stakeholder of Al Maha with its 37 per cent holding in the company. Apart from Al Anwar, the major shareholders of Al Maha are Ministry of Defence Pension Fund and Mustafa Sultan Enterprises.

The Sohar-based ceramic tiles producer, which has an installed capacity to produce six million square metres of ceramic tiles per annum, is waiting for government approval for additional gas allocation for expanding the capacity to 9.5 million square metres per annum, sources said earlier.

Capital expenditure
The company earlier said that the envisaged capital expenditure for the proposed expansion will be OMR7.5 million and no decision has been taken on funding the project. Presently, the company exports its products to Saudi Arabia, the United Arab Emirates, Lebanon and Jordan.

The Muscat Securities Market (MSM) has been witnessing better activity in the primary market, with several companies either having raised funds from investors or in the process of finalising their IPO plans this year.

Among these, Oman Telecommunications Company's (Omantel) OMR204 million share offer was the biggest one, which was followed by two independent power producers.

Al Batinah Power Co and Al Suwadi Power Company have announced the opening of their initial public offerings (IPOs) for subscription last Sunday.

The founding shareholders are selling these shares to the public to comply with the obligations in the project founders' agreement signed with the Electricity Holding Company (EHC) in 2010.

Both IPOs represent an offer of 35 per cent of the share capital of each company, said a company release earlier. The IPO subscriptions, which will close on June 9, 2014, are open for subscription to Omani and non-Omani investors including individual and institutional investors.

Al Batinah Power is offering 236,210,601 existing shares at a price of 128 baisas per share (comprising nominal value of 100 baisas and a premium of 26 baisas besides an issue expense of 2 baisas) totalling OMR30,234,957. Al Suwadi Power is offering 250,042,219 existing shares at a price of 130 baisas per share totaling OMR32,505,488.

Market analyst said that the investors are likely to dilute their holdings to arrange funds for applying for the share offers of these two power companies.

To get in touch with the reporter: businesseditor@timesofoman.com

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