Investment opportunities in IPOs in the power and water sector in Oman have traditionally attracted strong investors’ interest and the IPO offering from MCDC is also generating great interest from investors.
The roadshow meetings, which commenced on November 20 in Muscat and Salalah, were well attended by a wide cross-section of investor groups including institutional investors, high-net worth individuals and established family offices, according to a press release.
Through these meetings, MCDC’s management has presented the key investment highlights – which include a stable business model resilient to changes in water demand and electricity costs, experienced project founders (Sumitomo from Japan, Malakoff from Malaysia and Cadagua from Spain) as well as the diverse and experienced management team, strategic importance of the plant being the largest in Oman and a relatively higher projected dividend yield compared to other companies listed in this sector.
Investors have shown appreciation of the sound contractual framework for MCDC with a 20 year offtake agreement with the government owned Oman Power and Water Procurement Company.
Tamer Cankardes, deputy chairman said, “We are proud to construct a strategic water asset for Oman which caters to approximately 60 per cent of installed water desalination capacity in Muscat.
Founding shareholders’ expertise in operating similar plants in the region and across the globe is reflected through the fact that the combined water production capacity across the globe managed by the founding shareholders is more than eight times the capacity installed in the sultanate.”
Speaking on the investor roadshow, Subrina Thiagarajah, CEO of MCDC said, “We are delighted with both the investors’ turnout and interest shown during the IPO roadshows.
The roadshow is providing a great experience to meet the potential investors across Oman, share MCDC’s key investment highlights and address investors’ queries. The quality of discussions with the potential investors reflect their sound understanding of the inherent strengths of the sector as well as their deep interest in the investment opportunities in this sector.”
MCDC is offering 54,442,640 shares at a price of 116bz per share (comprising a nominal value of 100bz, premium of 14bz and offer expenses of 2bz per offer share). The IPO represents an offer of 35 per cent of the share capital of the company. The IPO offer period ends on December 18, 2017 and the shares are expected to be admitted to trading on the Muscat Securities Market on or around January 2, 2018.
At the IPO price, the company is projecting an average dividend yield of 8.3 per cent for the first five years with the first dividend expected to be announced in February 2018, and twice yearly thereafter.
The application form for the IPO is available for collection at any branches of the subscription banks: Bank Muscat, National Bank of Oman, Oman Arab Bank, Bank Dhofar, Bank Sohar and Ahli Bank.