Dubai: Oman's state energy firm, OQ, is set to sell up to 25 per cent of its exploration and production division, OQEP, in what will be the largest initial public offering (IPO) in the country's history.
The subscription period is expected to begin this month, with the shares listed on the Muscat Stock Exchange in October.
HSBC, Natixis, OIB, and Sohar International have been appointed as joint global coordinators, with Sohar International serving as the issue manager, as reported by Arabian Gulf Business Insight.
The IPO, aiming to raise approximately $2 billion (Dh7.3 billion) from the 25 per cent stake, will be the first listing in Oman for 2024. Bloomberg estimates the total value of OQ’s exploration and production assets at around $8 billion (Dh29.3 billion).
OQ plans to distribute $600 million (Dh2.2 billion) in annual dividends from 2024 to 2026 and will provide a performance-linked dividend equivalent to 90 per cent of the anticipated free cash flow after investments.
As part of its privatisation strategy, Oman is aiming to raise capital by reducing government ownership in various sectors. This trend mirrors moves by its GCC neighbours, the UAE and Saudi Arabia, who have also sold energy assets to diversify their economies and prepare for a post-oil future.
Oman’s partial privatisation effort also seeks to secure a spot in American finance company MSCI’s emerging market index, which requires at least three stocks meeting specific size and liquidity criteria.
