18 June 2013
Muscat: Sharqiyah Desalination Company (SDC), the first independent water project in the Sultanate that closed its OMR2.4 million initial public offering (IPO) on June 13, might have oversubscribed by 12 to 13 times with the company mopping up around OMR12-13 million, market sources said. The company sold 2.282 million shares, priced at OMR1.063 per share (which included a premium of 43 baisas and an issue expense of 20 basias), in one-month offer.
However, Loay Bataineh, DGM of Oman Arab Bank, said that the bank is still getting collection figures from different banks and verifying the same.
"The share offer has received a very good response from investor community and within two days we will get the final collection figure," added Bataineh.
Oman Arab Bank is the financial advisor and issue manager. Unlike other IPOs, the share offer was only available to individual investors.
The heavy oversubscription indicates that the financial system has ample liquidity and investors are waiting for attractive investment avenues.
The bank earlier said that in case of an oversubscription, 70 per cent of the offer will be allotted to individuals applied for 10,000 shares or less while 30 per cent will be for individuals applied for more than 10,000 shares. However, allotment will be subject to the approval of Capital Market Authority. The refund date will be June 27, while the shares will be listed on the Muscat Securities Market on June 30.
Market sources said that the share is expected to list at an attractive price, may be in the region of OMR1.7-1.8 due to expectation of a fabulous dividend. The company is expected to pay around 331 baisas as dividend this year.
Promoters divests 35%
The proceeds from the issue, including the premium, will accrue to the current shareholders in the ratio of shares offered. The promoters of the company divested 35 per cent of their holding as part of their contractual obligation with the government.
Sharqiyah Desalination Company owns and operates the desalination plant in Sur, which serves the Sharqiyah region that is growing in terms of population and economy. SDC addresses the depletion of the region's limited groundwater resource by processing over 200,000 square metres per day of seawater from its beach-wells catchment, one of the largest in the world.
SDC produces 80,000 square metres per day of drinking water to 350,000 inhabitants using a relatively energy efficient reverse osmosis technology.
During the year ended December, 2012, SDC generated revenues of OMR9.63 million and a net profit of OMR2.76 million. In 2012, the company has distributed a dividend of OMR2.8 million (OMR0.429 per share) related to the results of the year 2011.
The company is now working on the expansion with a possibility of expanding up to 135,000 square meters per day by the end of this year.
Muscat: Sharqiyah Desalination Company (SDC), the first independent water project in the Sultanate that closed its OMR2.4 million initial public offering (IPO) on June 13, might have oversubscribed by 12 to 13 times with the company mopping up around OMR12-13 million, market sources said. The company sold 2.282 million shares, priced at OMR1.063 per share (which included a premium of 43 baisas and an issue expense of 20 basias), in one-month offer.
However, Loay Bataineh, DGM of Oman Arab Bank, said that the bank is still getting collection figures from different banks and verifying the same.
"The share offer has received a very good response from investor community and within two days we will get the final collection figure," added Bataineh.
Oman Arab Bank is the financial advisor and issue manager. Unlike other IPOs, the share offer was only available to individual investors.
The heavy oversubscription indicates that the financial system has ample liquidity and investors are waiting for attractive investment avenues.
The bank earlier said that in case of an oversubscription, 70 per cent of the offer will be allotted to individuals applied for 10,000 shares or less while 30 per cent will be for individuals applied for more than 10,000 shares. However, allotment will be subject to the approval of Capital Market Authority. The refund date will be June 27, while the shares will be listed on the Muscat Securities Market on June 30.
Market sources said that the share is expected to list at an attractive price, may be in the region of OMR1.7-1.8 due to expectation of a fabulous dividend. The company is expected to pay around 331 baisas as dividend this year.
Promoters divests 35%
The proceeds from the issue, including the premium, will accrue to the current shareholders in the ratio of shares offered. The promoters of the company divested 35 per cent of their holding as part of their contractual obligation with the government.
Sharqiyah Desalination Company owns and operates the desalination plant in Sur, which serves the Sharqiyah region that is growing in terms of population and economy. SDC addresses the depletion of the region's limited groundwater resource by processing over 200,000 square metres per day of seawater from its beach-wells catchment, one of the largest in the world.
SDC produces 80,000 square metres per day of drinking water to 350,000 inhabitants using a relatively energy efficient reverse osmosis technology.
During the year ended December, 2012, SDC generated revenues of OMR9.63 million and a net profit of OMR2.76 million. In 2012, the company has distributed a dividend of OMR2.8 million (OMR0.429 per share) related to the results of the year 2011.
The company is now working on the expansion with a possibility of expanding up to 135,000 square meters per day by the end of this year.
© Times of Oman 2013
