Chemicals giant acquires majority stake in Oman Methanol

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MUSCAT: Consolidated Energy Limited (CEL), one of the world’s largest producers of methanol, has acquired a majority 60% stake in Oman Methanol Company LLC (OMC), which owns and operates a major methanol plant in Sohar Port.

CEL, a subsidiary of Proman AG and Helm AG, currently operates methanol production facilities in Trinidad and Tobago, and the United States, besides the Sultanate of Oman, with distribution networks reaching all major markets in the Americas, Europe, and Asia.

On December 29, 2023, CEL acquired an additional stake in OMC, increasing its total stake from 26.1% to 60.0% ownership for a consideration of $347 million.

Oman Methanol Company was established in 2004 as a joint venture between Methanol Holdings International Limited (MHIL), an affiliate of Switzerland-headquartered Proman, and Oman Methanol Holding Company LLC (a division of Omzest Group). The company’s methanol plant commenced operations in December 2007 and currently produces around 3,000 metric tons per day of methanol.

Helm AG, a leading distributor of chemicals globally, markets OMC’s methanol output to industrial consumers around the world. A versatile chemical intermediate used in the manufacture of a wide range of products of daily application, methanol is used in the production of fuel additives, solvents, polymers and specialized compounds. As a low emission fuel additive, methanol is used in gasoline and LPG blending and is a key component in the manufacture of biodiesel.

Earlier this week, Fitch Ratings assigned a 'BB-' first-time Long-Term Issuer Default Rating (IDR) to Consolidated Energy Ltd (CEL). The international ratings agency also assigned a 'BB+'/'RR2' to the company's secured debt, and a 'BB-'/'RR4' to its unsecured debt.

The 'BB-' IDR, said Fitch, reflects CEL's position as a leading global supplier of methanol, with over 7 million metric tons (MT) in production capacity.

Following the ramp up of its stake in Oman Methanol, CEL also announced the issuance of $745 million in new term loan debt as well as other unsecured debt in order to fund the $347 million acquisition. The new debt will also be used to refinance $658 million in existing secured debt, and fund $166 million deferred M&A consideration from Proman's 2020 acquisition of CEL.