The UAE’s only private utility developer Utico secured a $400 million investment from an Omani government-owned entity amid plans for an initial public offering and regional expansion.
The deal is the first overseas investment for Majis Industrial Services, which specialises in industrial water services in the port city of Sohar and has a capacity of 14,000 cubic metre per day for potable water in the sultanate.
The investment "sets a benchmark that this model is viable and sets a new growth market where we can offer services and build a new business model,” said Utico chief executive Richard Menezes.
Demand for water in the region is expected to grow four per cent annually, according to Majis. Utico, which last month commissioned a $100m trans-emirate pipeline connecting the emirates of Ras Al Khaimah, Umm Al Quwain, Sharjah and Ajman, has previously attracted investment from regional private investors such as Bahrain’s Asma Capital.
Mr Menezes declined to divulge the company’s current shareholding structure, but said the Omani investment was a “minority stake”. The company had more than three shareholders, all of whom were from the GCC, he added. Emirates NBD Capital acted as financial adviser for the transaction. White & Case and Clyde & Co provided legal advisory services for Utico and Majis respectively.
Following the transaction, Utico is eyeing opportunities to grow in Oman as well as Saudi Arabia.
The utility firm is in the middle of setting up an office in the kingdom and wants to bid on water projects that have been tendered, said Mr Menezes. Emirates NBD is advising the firm on its potential listing.
In the UAE, the company has qualified and bid for Abu Dhabi’s 200 million imperial gallon per day Taweelah independent water producer project - the largest desalination project in the world.