OQ Gas Networks raises about $750m in largest IPO of Oman

Upon listing, the company will be the third largest on the MSX by market cap

Muscat Stock Exchange. Courtesy Investcorp
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Oman’s OQ Gas Networks, the pipeline business of state oil company OQ, said it raised 288 million Omani rials ($750 million) in the initial public offering after pricing it at the top of the range, making it the Sultanate's biggest IPO.

The IPO drew "overwhelming demand" from local, regional and international investors, the company said on Thursday. The total gross demand for the offering amounted to more than 4 billion rials ($10 billion), implying an oversubscription level of 14 times in aggregate, including anchor investors.

The final offer price is set at 140 baizas per share following the completion of the book-building and public subscription process.

OQGN offered nearly 2.1 billion ordinary shares, representing 49 per cent of issued share capital.

Following completion of the IPO, OQ will continue to own 51 per cent of OQGN’s share capital, the company said.

The company’s shares are expected to start trading on the Muscat Stock Exchange (MSX) on October 24 under the symbol “OQGN”.

Upon listing, it will have a market capitalisation of 606 million rials, which will make OQGN the third largest company on the MSX by market capitalisation.

OQGN, which holds a monopoly over critical gas transportation infrastructure in Oman, recorded no gas supply interruptions in 2022, the company said.

The network involves a system of pipelines, metering facilities, compressor stations, gas supply stations and block-valve stations.

Last year, the company transported 39.4 billion cubic metres of gas from six producers to about 130 consumers through 4,031km of pipelines, supported by three compressor stations and 25 supply stations.

“The IPO of OQGN is part of a broader divestment programme envisioned by the government and being implemented by Oman Investment Authority – the integrated sovereign wealth fund of the sultanate of Oman,” Talal Al Awfi, OQ group chief executive and OQGN chairman, said in September.

The listing activity in the Middle East and North Africa region continued to gather momentum in the second quarter of this year, as the volume of IPOs on regional bourses climbed by 44 per cent annually amid robust economic growth.

Growth in the Mena IPO deals was driven by Saudi Arabia and the UAE, the top two Arab economies, global consultancy EY said in its Mena IPO Eye Q2 2023 report in August.

The number of IPO transactions rose to 13 during the three-month period to the end of the June, bucking the global slowdown in equity capital markets activity. However, proceeds from Mena listings dropped by 80 per cent to $1.8 billion, according to EY data.

Updated: October 12, 2023, 5:16 PM