HomeNewsOman's OQ to list up to 49% stake in methanol, ammonia and LPG arm

Oman's OQ to list up to 49% stake in methanol, ammonia and LPG arm

11/4/2024

Oman's OQ Base Industries (OQBI), the methanol, ammonia and liquefied petroleum gas (LPG) arm of state-owned OQ, plans to list an up to 49% stake on the local stock exchange, it said on Monday, adding to a string of IPOs in the Gulf country.

The listing is part of a privatization program by state-owned energy group OQ, which is helping Oman - a small non-OPEC oil producer - to diversify its economy and cut its debt.

It would follow the flotation of OQ's exploration and production business OQEP.OM, which raised about $2 B last month in the country's biggest IPO ever.

OQBI is in talks with potential investors and working with bankers "to determine the fair price for the shares", CEO Khalid Khalfan Al Asmi told Reuters, without providing further details.

Based in Salalah, home to Oman's biggest port, OQBI operates three strategic divisions: methanol, ammonia and LPG products.

Methanol is a lower-carbon fuel while ammonia is mainly used in fertilisers and chemicals. LPG includes propane, butane, and cooking gas, which are used as fuel for cars, heating.

The company has a combined capacity of 1.8 MMtpy of production, with methanol accounting for around 1.1 MMtpy of the total.

OQBI, which exports all of its produced methanol and ammonia and 87% of its LPG products, was leveraging its strategic location near major shipping lines, Al Asmi added.

It expects to pay a dividend of 32.7 MM Omani riyals ($85 MM) for 2024 and distribute a dividend at least 5% higher than this year's payout for 2025 and 2026.

The company posted first-half revenue of more than $500 MM, with core profit of over $200 MM, Al Asmi said.

OQBI said that all the proceeds from the offering will be distributed to the selling shareholders, with the subscription period expected to start this month. The shares are expected to begin trading in December.

It has hired Morgan Stanley, Bank Dhofar and Bank Muscat for the IPO.

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