Following the commencement of the phase 1 (book building process) investor meetings for its initial public offering (IPO), Musandam Power Company (MPC) has said that the investor interest in its IPO is gaining momentum.
MPC, alongside the issue manager – Bank Muscat Investment Banking, has been holding several meetings with key investors. The meetings, which were held in Muscat, Salalah and Sohar, 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 statement issued by the company.
Senior members representing the founding shareholders of the company, including the management team of MPC interacted with investors and analysts during the meetings.
Speaking about the positive response to the IPO, Sultan al Burtmani, shareholders’ spokesperson at MPC, said, “The IPO of MPC, which is the first from Oman Oil and Orpic Group, is generating significant interest amongst the investor community in Oman. MPC has the backing of its project founders with a demonstrated track record of implementing large and complex independent power plants globally and in Oman.”
He said that the project founders – Oman Oil and Orpic Group and LG International Corp (LGI) – will remain shareholders post-IPO, with an aggregate holding of 60 per cent. “The project founders will continue to ensure reliable management and governance of the company. We are very pleased with the strong interest and enthusiasm surrounding this IPO.”
MPC is offering 28,156,000 shares in a price band of 260bz-325bz per share. At the IPO price, the company offers an average projected dividend yield of 8.6 per cent to 10.7 per cent.
Ahmed Tufail al Rahman, chairman of MPC, said, “The keen interest of the investor community reflects the key highlights of the offering: Attractive and robust sector, strong and reputed founding shareholders, steady and reliable cash flows based on power purchase agreement with OPWP till the year 2032 indifferent to the power demand, and a dividend yield that compares favourably to the peers in the industry.”
Rahman said that the investors have particularly been attracted to the offer as it offers a clean equity story – only power plant in Musandam area with no cash sweeps, no litigation either with OPWP or with EPC contractor. “Investors have also noted that the first dividend of 27.6bz is to be distributed to all shareholders including IPO investors within one month of IPO listing (in December 2019),” he added.
MPC’s project director Salim al Hashmi, said, “In the long-term perspective, the investment offers investors the opportunity to be part of a unique success story with a strategic asset situated in the Musandam peninsula.”
Investors in phase 1 of the IPO can submit their application forms at the head offices of Bank Muscat, BankDhofar, Ahlibank, NBO, Gulf Bader Capital Markets (GBCM), U-Capital or United Securities from November 3 to November 7.