Asyad Shipping Company has launched the latest privatisation IPO in Oman, with the deal expected to fetch up to US$376m and could be upsized to as much as US$430m.

Asyad Group, which is owned by the Oman Investment Authority, will offer secondary shares for a minimum 20% free-float with the option to increase it to 23%.

There are already commitments from investors for 30% of the deal and 25% will go to retail. The remainder will be offered to international and local institutions.

Expanding ECM activity in Oman has been powered by state-backed oil company OQ, which listed Abraj and OQ Gas Networks in 2023 and OQ Exploration and Production and OQ Base Industries in 2024, earning comparisons to Adnoc's role in helping open Abu Dhabi’s market with its stable of spin-offs.

Prior to these deals was the US$61m-equivalent IPO of Pearl Real Estate Investment Fund in 2022.

OQ’s spin-offs are expected to be the key peers for Asyad Shipping on a dividend yield basis with those names trading around 8%–8.9%.

Asyad Shipping has set a fixed dividend of US$150m each for 2025 and 2026 and 95% of net income from 2027.

Pricing in line with OQ companies suggests a valuation of US$1.67bn–$1.88bn-equivalent and a deal size of US$334m–$376m for 20% of the company and up to around US$430m for 23%.

Asyad Shipping has a fleet of 89 ships connecting more than 60 countries. Oil and gas accounts for around 51% of its time charter equivalent revenue, a measure based on subtracting voyage costs and dividing by the length of the round trip. The company transports crude oil and petroleum products, LNG, dry bulk materials and containers.

Between 2021 and 2023 its adjusted Ebitda grew at a CAGR of 32% while revenue grew at a CAGR of 22%.

For 2023, adjusted Ebitda was US$478m off TCE revenue of US$732.5m and total revenue of US$944.7m.

For the nine months to September 30 adjusted Ebitda was US$423m off TCE revenue of US$613.3m and total revenue of US$713.9m.

Net leverage was 2.3 times Ebitda as of September 30, down from 2.7 times at the end of 2023.

Learning curve

Some IPO discount may be required given the mixed performance of previous deals, with Oman being on something of a learning curve for ECM transactions last year.

OQEP suffered a weak aftermarket after experimenting with pro rata allocations and applying a 10% discount to the 40% retail tranche.

Shares on debut closed 8.2% below the OR0.39 issue price and remain below water at OR0.341.

Mistakes were corrected on OQBI, which did away with a retail discount and used discretionary allocations for its international tranche.

Shares still closed below issue on debut at OR0.107 versus OR0.111 but have traded up and closed at OR0.113 on Wednesday.

Asyad Shipping will have no retail discount and will apply discretionary allocations throughout the institutional tranche.

The free-float is also smaller than previous deals that have generally offered 49%, with the exception of OQEP's IPO in which 25% was sold.

“They’ve been more conservative to try to have a better aftermarket and taken into account the impact of transaction size,” said a banker involved.

International demand is said to be fairly limited and largely focused on shipping and frontier market specialists with more generalist investors conscious of previous Omani performance and limited allocations.

Books open for Asyad in early February with the aim of having everything wrapped up before Ramadan begins on February 28, followed by listing in early March.

EFG Hermes, Oman Investment Bank, Jefferies, JP Morgan and Sohar International are joint global coordinators, and joint bookrunners with Credit Agricole/Kepler Cheuvreux and Societe Generale.

Source: IFR