27 May 2013
Muscat: The shareholders of Al Maha Ceramics Co. are planning to divest 40 per cent of their holding in the company in favour of investing public through an initial public offering (IPO) this year.
Al Anwar Holding, which has a 37 per cent holding in the company, said that Al Maha Ceramics will convene an extra ordinary general meeting for getting shareholders' approval for the proposed IPO. The EGM is scheduled for June this year. Thereafter, the company will seek approval from the Capital Market Authority (CMA) and it takes over four months for conducting a due diligence and for preparing prospectus for the share offer. Al Maha, which started operation in 2006, has a paid-up capital of OMR4 million.
Apart from Al Anwar, the major shareholders of Al Maha are Ministry of Defence Pension Fund (10 per cent) and Mustafa Sultan Enterprises (10 per cent). Other shake holders have less than 10 per cent holding in the company, said Arvind Bindra, Chief Executive Officer of Al Maha Ceramics. The IPO will be a premium issue.
Expanding capacity
Bindra said the company, which has an installed capacity to produce six million square metres of ceramic tiles per annum, is waiting for government approval for additional gas allocation for expanding the capacity to 9.5 million square metres per annum. "We have proposed the expansion some time back and now we are waiting for a final approval from the government," he added.
The envisaged capital expenditure for the proposed expansion will be OMR7.5 million and no decision has been taken on funding the project. The proceeds of the IPO will go to the stakeholders (and not to the company) who divest their holding. The Sohar-based ceramic tiles producer will be launching tiles with digital printing in July this year, which is for both domestic and export markets. "We will start trial production in June." The company anticipates a double digit growth in demand for ceramic tiles in the country this year. "Saudi market is doing well, Oman is stable and the UAE is picking up. Half of our production is sold in Oman, with the remaining exported to overseas markets."
Presently, the company exports its products to Saudi Arabia, the UAE, Lebanon and Jordan.
Buoyant demand
Saudi market demand is expected to remain buoyant as the Saudi government has announced huge investment plans for developing new economic cities and a plan for constructing half-a-million houses by 2015. "Our estimate for ceramic tiles market in the region is approximately 200 million square meters per annum," noted Bindra.
On the competitive advantages, Bindra said the quality of local clay is very good and the cost of electricity is reasonable in Oman. So, the cost of production is lower than that of the UAE."
Muscat: The shareholders of Al Maha Ceramics Co. are planning to divest 40 per cent of their holding in the company in favour of investing public through an initial public offering (IPO) this year.
Al Anwar Holding, which has a 37 per cent holding in the company, said that Al Maha Ceramics will convene an extra ordinary general meeting for getting shareholders' approval for the proposed IPO. The EGM is scheduled for June this year. Thereafter, the company will seek approval from the Capital Market Authority (CMA) and it takes over four months for conducting a due diligence and for preparing prospectus for the share offer. Al Maha, which started operation in 2006, has a paid-up capital of OMR4 million.
Apart from Al Anwar, the major shareholders of Al Maha are Ministry of Defence Pension Fund (10 per cent) and Mustafa Sultan Enterprises (10 per cent). Other shake holders have less than 10 per cent holding in the company, said Arvind Bindra, Chief Executive Officer of Al Maha Ceramics. The IPO will be a premium issue.
Expanding capacity
Bindra said the company, which has an installed capacity to produce six million square metres of ceramic tiles per annum, is waiting for government approval for additional gas allocation for expanding the capacity to 9.5 million square metres per annum. "We have proposed the expansion some time back and now we are waiting for a final approval from the government," he added.
The envisaged capital expenditure for the proposed expansion will be OMR7.5 million and no decision has been taken on funding the project. The proceeds of the IPO will go to the stakeholders (and not to the company) who divest their holding. The Sohar-based ceramic tiles producer will be launching tiles with digital printing in July this year, which is for both domestic and export markets. "We will start trial production in June." The company anticipates a double digit growth in demand for ceramic tiles in the country this year. "Saudi market is doing well, Oman is stable and the UAE is picking up. Half of our production is sold in Oman, with the remaining exported to overseas markets."
Presently, the company exports its products to Saudi Arabia, the UAE, Lebanon and Jordan.
Buoyant demand
Saudi market demand is expected to remain buoyant as the Saudi government has announced huge investment plans for developing new economic cities and a plan for constructing half-a-million houses by 2015. "Our estimate for ceramic tiles market in the region is approximately 200 million square meters per annum," noted Bindra.
On the competitive advantages, Bindra said the quality of local clay is very good and the cost of electricity is reasonable in Oman. So, the cost of production is lower than that of the UAE."
© Times of Oman 2013
