MUSCAT: Majan Glass, the country’s leading glass container manufacturer, has announced that its principal shareholder – Oman Investment Authority (OIA) – will purchase outstanding shares from the market following a decision to convert the publicly traded company (SAOG) into a closed joint stock company (SAOC).
The move, according to market experts, is in line with OIA’s strategy to divest from some of its subsidiaries through privatisation or partial divestments via Initial Public Offerings (IPO) on the Muscat Stock Exchange (MSX). OIA owns a 75.26% stake in Suhar-based Majan Glass, a major producer and exporter of glass containers and jars for soft drinks, food and beverages.
In a filing to the Financial Services Authority last week, Majan Glass said it had received preliminary approval from the Authority for the conversion of the company’s legal structure. It also authorised the purchase by OIA of company shares from registered shareholders “that intend to sell any portion of their shareholding”.
It added that shares will be purchased at the rate of RO 0.004 per share – a value determined on the basis of the company’s assets and possessions. The share buyback will span a weeklong period from November 21 to 27, 2024, it stated.
During fiscal 2023, the company recorded a 6-per cent dip in total revenue to RO 12.26 million, down from RO 13.02 million in 2022, along with a post-tax loss of RO 748,000, which was however lower than the previous year’s net loss of RO 985,000.
It attributed the downtrend to a combination of factors, notably disruptions in markets in the Levant region due to geopolitical tensions, inflationary trends that have depressed demand in European markets, higher interest rates and higher raw material prices. Also weighing on sales were the ongoing boycott of some international carbonated beverage brands in some markets, and higher shipping costs due to disruptions in the Red Sea.
However, boding well for its goals to switch to locally produced, cost-competitive raw materials is a recent agreement signed by Minerals Development Oman (MDO) – a subsidiary of OIA – for the commercial development of glass production grade silica sand deposits in Block F 51 in Al Wusta Governorate, said Mohammed bin Abdullah al Farsi, Chairman – Majan Glass, in a recent financial report for Q3 2024.
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