Muscat City Desalination to launch IPO soon

Muscat - 

Muscat City Desalination Company (MCDC), owner of the Ghubrah independent water project (IWP), announced its intention to launch an initial public offering (IPO) in the second half of this month. Ghubrah IWP is Oman’s largest operating water plant.

As stated in the project founders’ agreement, the founders of the project are required to offer 35 per cent of their share capital to the public through an IPO. Accordingly, MCDC will offer 54,442,640 shares to the public through its IPO, according to a press release issued by the company.

Bank Muscat’s investment banking division is the financial advisor and issue manager for the IPO exercise.

MCDC is promoted by global leaders with vast experience in the water industry: Malakoff International (Malaysia), Sumitomo Corporation (Japan) and Cadagua SA (Spain).

MCDC is the owner of Oman’s largest water plant contributing to approximately 24 per cent of total water capacity in the interconnected zone. MCDC owned plant with proven desalination technology is a strategic asset located in Muscat.

The company has a long term contracted water purchase agreement until 2034 with Oman Power and Water Procurement Company (OPWP), ensuring stable and predictable cash flows.

On the back of this contracted water purchase agreement, MCDC plans to offer an attractive dividend yield to IPO investors, further details of which would be shared by the company upon obtaining the final approvals from the Capital Market Authority.

The plant has successfully completed more than a year of production since its commercial operation date on February 19, 2016.

Commenting on the proposed IPO, Subrina Thiagarajah, CEO of MCDC said, “This is a very exciting phase for MCDC. The company’s plant, Ghubrah IWP, has been successfully securing the water needs of Muscat and its residents for over a year. The IPO is a unique opportunity both as an investment in the sultanate’s largest operating desalination plant, and in an essential commodity that is a part of everyday life.”

Ghubrah IWP has been built with a total investment of RO103mn, with a total capacity to deliver 42mn gallons of potable water every day.

“MCDC, with the Ghubrah IWP, makes a valuable contribution to Muscat and Oman, through the provision of water to the people and industries. IPOs in the water sector in Oman have been a rare opportunity, but have a proven track record, with strong demand and growth projections.

The MCDC IPO offers a unique opportunity for a diversified investment in an industry that is shaping a young and modern metropolis,” Subrina added.

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