Muscat: Al Batinah Power, which closed subscription of its initial public offering (IPO) on June 9, has decided to allot a minimum of 5,000 shares and thereafter at the rate of 8.217 per cent for additional share applied in the case of retail applicants. As far as institutional investors (or those who applied for 600,100 shares or more) are concerned, applicants will get 4.87 per cent allotment, said a top-level official at the Capital Market Authority (CMA).
Similarly, Al Suwadi Power has decided to allot a minimum of 5,000 shares and thereafter at the rate of 9.226 per cent for additional shares applied for retail or category one investors (who applied for 600,000 shares or less). In the case of institutional or category two investors, applicants will get 4.95 per cent allotment.
The CMA official said that Al Batinah Power share offer raised OMR326.60 million, while Al Suwadi mopped up OMR341.7 million, taking the total application money to OMR668.1 million. The retail segment or category one of both power companies was oversubscribed by 10.8 times and institutional segment was oversubscribed to the tune of 10.5 times.
Listing on June 23
The allotment of shares, which has already been started, will be completed within a day or two. The shares will be listed on the Muscat Securities Market (MSM) on June 23, according to the prospectus.
The shareholders of both companies divested 35 per cent of their holding, aggregating to OMR62.7 million. In each IPO, 65 per cent of the shares made available for subscription were reserved for investors applying for a minimum of 1,000 shares and a maximum of 600,000 shares, and the balance 35 per cent of the shares have been reserved for investors applying for 600,100 shares or more.
Al Batinah Power IPO was offered at 128 baisas per share (comprising nominal value of 100 baisas, a premium of 26 baisas and an issue expense of 2 baisas). Likewise, Al Suwadi Power was offered at a price of 130 baisas per share (comprising nominal value of 100 baisas, share premium of 28 baisas and an issue expense of 2 baisas).
At the IPO price, both companies offer an average projected dividend yield of 8.1 per cent for the first five years. This compares to an average dividend yield of 6.5 per cent for other power companies listed on Muscat Securities Market. Both power projects, built with a combined capital expenditure of $1.7 billion, constitute 27 per cent of Oman's installed power capacity of 5,600 megawatt.
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