Muscat – OQ Exploration & Production Company’s (OQEP) initial public offering (IPO), the largest in Oman’s history, has been oversubscribed 2.4 times, according to data released by the Financial Services Authority (FSA).
The offer attracted demand for approximately 4.820bn shares against an offer size of 2bn shares, reflecting confidence from both local and foreign investors in the company and the Omani capital market.
The RO780mn IPO generated demand for shares worth RO1.814bn at the upper range of the offered price of 390bz per share, indicating strong interest from both institutional and retail investors, as per FSA data.
The FSA has approved the allocation of shares to subscribers. The Category I portion of the IPO, which includes local and foreign institutions, was oversubscribed 3.36 times, with investors allocated 29.779% of their subscribed shares.
In Category II, the portion reserved for large individual investors was oversubscribed 3.067 times, allowing for an allocation of 32.608% of subscribed shares. The portion reserved for small retail investors in Category II was oversubscribed 1.269 times, with a minimum allocation of 8,000 shares plus 23.1808% of the remaining shares to each subscriber.
In a statement to the Oman News Agency, H E Abdullah bin Salim al Salmi, Executive President of the Financial Services Authority, noted that the FSA adopted an allocation methodology that considers the interest of all segments of investors and contributes to expanding participation in public subscriptions. This approach, he said, should enhance the role of the capital market as an effective source of financing for the national economy.
H E Salmi emphasised that the strong investor interest and confidence demonstrated in the OQEP IPO highlights the importance of the capital market in supporting economic activities and financing various investment projects.
The OQEP IPO comprised a total of 2bn shares, representing 25% of the company’s total issued share capital. The IPO was expected to raise up to RO780mn (equivalent to $2.026bn) at the top of the price range, valuing OQEP at up to RO3.120bn (equivalent to $8.104bn).
OQEP’s initial public offering marks the largest IPO in Oman’s history and the first of its kind in the exploration and production sector. OQEP shares are expected to commence trading on the Muscat Stock Exchange on or around October 28, 2024, under the trading symbol ‘OQEP’.
The company has adopted a quarterly dividend distribution policy to pay dividends after the IPO. OQEP has stated that it has a track record of robust and sustainable cash flow generation and intends to maintain a dividend policy designed to return substantially all of its distributable free cash flow after providing for growth opportunities and investments.
The company expects to pay its first dividend distribution of approximately RO57.7mn ($150mn) around December 2024 for Q3 2024 and approximately RO57.7mn ($150mn) around March 2025 for Q4 2024, equivalent to an annualised dividend payment of approximately RO230.7mn ($600mn).
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