10 June 2015
Muscat - Shares of Galfar Engineering and Contracting Company surged ahead by 9.17 per cent at 131 baisas on the Muscat Securities Market (MSM), on renewed interest among long-term investors after the company disclosed detailed information on Muscat Expressway project claims and receivables in their books.
Share trading in Galfar Engineering resumed on Wednesday after it was suspended for seven consecutive days.
Galfar on Tuesday said that the company would try to take arbitration route to recover OMR45 million fund (which is recognised as revenues in books) from the Muscat Municipality.
The Muscat Municipality has offered only OMR29.9 million as final settlement, which was rejected by the board. As many as 9.22 million shares changed hand, with the turnover touching OMR1.2 million, out of the bourse's total turnover of OMR4.78 million.
"Investors with long-term perspective may be accumulating the stock. There was good volume as well," said a market analyst, who does not want to be named. However, the stock is trading at half of its book value since the share was falling for quite sometime.
The market analyst said that there is clarity on the company's receivables linked to Muscat Expressway and Central Corridor projects now. However, the arbitration may take some time.
Galfar on Tuesday said it claimed OMR100 million for apparent additional cost incurred for building Muscat Expressway and Central Corridor projects for Muscat Municipality few years ago.
The proposed final settlement (OMR29.9 million) of Muscat Municipality, which was rejected by Galfar board last week, is less by OMR16 million than the income recognised.
The original contract value of Muscat Expressway project, which was awarded in June 2005, was OMR131.7 million, while Central Corridor project was awarded at a value of OMR10.99 million in February 2006.
The Muscat Expressway project was completed in different phases between January, 2009 and April, 2012, while Central Corridor was ready in January, 2008. The expressway project was subject to a number of substantial variations, redesigning and additional works, according to the company.
© Times of Oman 2015