OQBI announces its intention for IPO on MSX

49pc of OQBI Shares to Go on IPO, to list on MSX

Salalah: OQ Base Industries (OQBI) (Salalah Free Zone) SAOG (under transformation) has announced its intention to offer up to 49% of its shares in an initial public offering (IPO) and list its ordinary shares on the Muscat Stock Exchange (MSX).

The move aims to diversify the company’s shareholder base, expand its network of relationships and enhance its position among key stakeholders, in addition to providing liquidity opportunities to shareholders.

The subscription for the first and second category investors is expected to start in this month (November 2024), after obtaining the required approvals from the Financial Services Authority, 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 production plants o that produce methanol, ammonia and LPG products, with a combined production capacity of 1.8 Mtpa.

OQ Base Industries is located in a strategically attractive position in Salalah Free Zone, a tax-exempt area near the largest port in the Sultanate of Oman, the Port of Salalah, giving the company a competitive advantage to access markets in the Middle East, North Africa, Europe and Asia.

This offering is in compliance with the provisions of Islamic Sharia, according to the statement issued by the Sharia Supervisory Board of Bank Dhofar Islamic, which it issued in its capacity as Sharia advisor for the issuance, confirming in it:Based on data up to the date of this statement:

The offering is in compliance with Islamic Sharia in accordance with the standards issued by the Sharia Accounting and Auditing Organization for Islamic Financial Institutions.

Commenting on OQ Base Industries’ intention to float its shares on the stock exchange, Ashraf Hamad Al Maamari, CEO of OQ Group, said: “We are pleased to announce the intention to float OQ Base Industries – one of the group’s companies – which comes after the success of three IPOs for the group, which were met with wide interest from investors. Subscription rates doubled as a result of the outstanding financial and operational performance, in addition to the investment-stimulating dividend policy. This strategic step also reflects our future directions towards growth and investment in the energy sector.”

For his part, Eng. Ali Mohammed Al Lawati, Chairman of OQ Base Industries, said: “Offering upto 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.” He added that this step enhances further good governance and transparency.

Eng. Khalid Al Asmi, CEO of OQBI, noted that: “This is a significant occasion for OQ Base Industries, a culmination of the hard work of all its employees and a reflection of the deep strategic value it holds. The offering will enable local, regional and international investors to be part of a key asset in the Sultanate of Oman, with significant potential for growth in the global market,” He added, and expressed his happiness at announcing the company’s intention to offer its shares for subscription, and considered this step a culmination of the efforts made by the work team and the trust the company has gained from its customers and partners.

He further stressed that the strategic location of the Sultanate of Oman has greatly contributed 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. 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 RO 32.7 million (approximately USD 85 million) for the fiscal year 2024. It expects to distribute a first dividend of approximately RO 24.5 million (approximately USD 63.6 million) for the first nine months of 2024 by January 2025, and to pay a second dividend for the last three months of 2024 of approximately RO 8.2 million (approximately USD 21.3 million) by April 2025.

In the next two fiscal years ending on December 31, 2025 and December 31, 2026, the Company intends to pay dividends that are at least 5% higher than the dividends 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 merger and acquisition activities.

The Company’s dividend policy reflects its expectations of strong cash flows and long-term cash earnings, while at the same time enabling the Company to obtain sufficient capital to finance its ongoing operational needs and the investment necessary to achieve long-term growth.

OQ Base Industries’ ability to pay dividends depends on several factors, including market conditions, the availability of distributable reserves, capital expenditure plans, other cash requirements in future periods, as well as obtaining necessary approvals.