MUSCAT: Sohar Power Company SAOG, a leading player in Oman’s electricity generation sector, has scheduled an extraordinary general assembly (EGM) to assess and analyse potential insolvency measures.
This crucial decision has been taken by the company’s Board of Directors in response to the prevailing financial challenges and constrained market opportunities to remain in operation
As per the latest financial data, the company’s current capital stands at RO 22.1 million, while its outstanding debts amount to RO 39 million.
Notably, shareholder equity reflects a negative value of RO 30.8 million.
CEO Sreenath Hebbar said in a regulatory filing to Muscat Stock Exchange (MSX) that the plant has been unsuccessful in securing a contract with Nama Power & Water ever since the term of its Power & Water Purchase Agreement with Nama came to an end on May 15, 2022.
“The company actively engaged with the Authority for Public Services Regulation (APSR), Nama PWP and other parties to explore options aimed at extending the company’s operating life, however these engagements were ultimately unsuccessful and will not meet the company’s ambitions,” Hebbar stated.
Following the annulment of the Power 2022 procurement process, Sohar Power explored options to offer its capacity under the Spot Market and Bilateral Contract Framework, both of which were ultimately found to be unviable for various reasons. It also decided not to participate in the more recent Power 2024 procurement process due to a number of constraints.
Finally, saddled with an outstanding debt of RO 39 million and with no expectation that the lenders would consider an extension of the maturity date or restructuring of the debt, the Board of Directors resolved to convene an EGM to consider and approve the proposal for commencement of bankruptcy proceedings, the CEO added.
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