Muscat: OQ Base Industries Corporation (under transformation) will offer up to 49 percent of its shares for an initial public offering (IPO) and list its ordinary shares on the Muscat Stock Exchange (MSX).
The decision is part of the company's efforts to diversify the shareholder base and expand its network of relationships, in addition to providing liquidity opportunities for shareholders.
The subscription for first and second-category investors is expected to start this November after obtaining the required approvals from the Financial Services Authority (FSA), and the shares will be listed on the Muscat Stock Exchange in December 2024.
This offering is an important opportunity to invest in an integrated company that operates three advanced plants for the production of methanol, ammonia, and LPG products, which have a combined total production capacity of 1,816 kilotons per year.
This offering is Sharia-compliant according to the statement issued by the Sharia Supervisory Board of BankDhofar Islamic, which it issued in its capacity as Sharia advisor for the offering, confirming - based on the data up to the date of this statement - the Sharia-compliant offering, under the standards issued by the Sharia Accounting and Auditing Organization for Islamic Financial Institutions.
OQ Base Industries is located in the Salalah Free Zone, a tax-free zone located near the largest port in the Sultanate of Oman, 'Salalah Port', which gives the company a competitive advantage to access the markets of the Middle East, North Africa, Europe, and Asia.
Ashraf bin Hamad al Maamari, CEO of OQ Group, said that the IPO of OQ Base Industries, one of the group’s companies, comes after the success of three IPOs for the group, which were met with wide interest from investors, as subscription rates doubled as a result of the distinguished financial and operational performance, in addition to the investment-stimulating dividend distribution policy, noting that this strategic step reflects its future directions towards growth and investment in the energy sector.
Eng. Ali bin Mohammed al Lawati, chairman of OQ Base Industries, said that offering 49 percent of the company’s shares for subscription represents a qualitative shift in the company’s journey, contributing to further growth and development and keeping pace with its future aspirations to contribute to supplying global markets with its products, noting that this step enhances more governance and transparency.
He added that this offering will enable local, regional, and international investors to be part of a major asset in the Sultanate of Oman, with great potential for growth in the global market.
Eng. Khalid bin Khalfan Al Asmi, CEO of OQ Base Industries, said that this step represents the culmination of the efforts made by the work team and the fruit of the trust that the company has gained from its customers and partners, stressing that the strategic location of the Sultanate of Oman has contributed significantly to enhancing the competitiveness of the company’s business model and raising the value of its products in global markets.
OQ Base Industries has adopted a semi-annual dividend policy to pay dividends after the offering, as the company intends to maintain a strong dividend policy, aiming to return all distributable free cash flows to shareholders after providing growth opportunities and taking into account credit rating considerations.
The company expects to distribute dividends of RO32.7 million (RO85 million) for the financial year 2024. It expects to pay a first dividend of approximately RO24.5 million (approximately RO63.6 million) for the first nine months of 2024 by January 2025, and a second dividend of approximately RO8.2 million (approximately RO21.3 million) for the last three months of 2024 by April 2025.
For the two fiscal years ending December 31, 2025, and December 31, 2026, the company intends to pay a dividend of at least five percent more than the dividend paid in the previous year.
For the fiscal year ending December 31, 2027, and beyond, the Company expects to distribute any cash not allocated for general corporate purposes, growth investing, or M&A activities.
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