Following the successful launch of the Initial Public Offering (IPO) of Dhofar Generating Company (DGC) SAOG (under transformation), investor interest is gathering momentum. The company, alongside the ‘issue manager’ Bank Dhofar – Investment Banking Division and ‘Global Coordinator and Bookrunner’ EFG Hermes UAE Limited held a roadshow meeting with key investors, analysts and brokerages on 11 July 2018.
The meeting which was held in Muscat was well attended by a wide cross-section of investor groups including institutional investors, high-net worth individuals and established family offices. Senior members representing the founding shareholders of the company, along with the management team of DGC comprising the CEO and CFO interacted with investors and analysts and provided insights into the various aspects of the offer.
Speaking at the event, Mr. John Clark, Board Chairman of DGC said, “DGC (Salalah II IPP) comprises of two power generation plants with a combined capacity of 718 MW and is the largest power producer in the Dhofar governorate of Oman. The company is producing an essential utility that is the cornerstone of growth of communities, business & industries in the region. DGC has already established a reputation for excellence with the landmark achievement of Commercial Operation Date of the 445 MW power plant as per scheduled timeline, and the Plant recording over 99% reliability since acquisition of the existing plant in June 2015 and commencement of operations of the new plant in 2018.”
Discussing the positive responses to the IPO, Mr Naif Al Awaaid, CEO of DGC, added, “The offer has attracted significant interest amongst the investor community in Oman, which reflects the key highlights of the offering: an attractive and robust sector, strong & reputed founding shareholders, steady & reliable cash flows unrelated to power demand, and a dividend yield that compares well to the peers in the industry.”
Further elaborating the strength of the offer, Mr. Al Awaaid said, “DGC has the backing of its Project Founders with an established track record in the global and regional power industry. The Project Founders, Mitsui & Co., Ltd., ACWA Power and Dhofar International Development & Investment Holding Company SAOG (DIDIC) will remain shareholders post-IPO, with an aggregate holding of 60% and they will continue to ensure reliable management and governance of the company. We are very pleased with the strong interest and enthusiasm surrounding the IPO of DGC.”
DGC is offering 88,896,000 Offer Shares at a price of Bzs 259 per Offer Share (Comprising a Nominal Value of Bzs 100, premium of Bzs 157 and Offer Expenses of Bzs 2 per Offer Share). The IPO represents an offer of 40% of the share capital of the company.
At the IPO price, the company offers an average projected dividend yield of 7% for the first five years (excluding issue expenses). The first dividend of Bzs 9 per share is expected to be paid in February 2019 and Bzs 9 per share to be paid in August 2019 with twice yearly dividend declaration thereafter.
The IPO will close on 30 July 2018.
Subscription
Application form for the IPO is available for collection at any branches of the subscription banks: Bank Dhofar, bank muscat, National Bank of Oman, Oman Arab Bank, Bank Sohar and Ahli Bank.
Information for applicants is available at www.dgcoman.com
More information on the Founders
Mitsui & Co., Ltd.
Established in 1947, Mitsui is today one of the most diversified and comprehensive trading, investment and service enterprises in the world, with 137 offices in 66 countries as of 1 April 2018. Mitsui is actively taking on challenges for global business innovation around the world, with total assets of about USD 106.7 billion (as of 31 March 2018). Mitsui is listed on the Tokyo Stock Exchange with about 98.2% of its outstanding shares listed.
Mitsui has several decades of IPP experience with a significant presence in the IPP space in most geographical regions, including the Americas, Asia-Pac, Middle East, Africa and Europe across all fuel types. Mitsui owns a gross power generation capacity of 34 GW with a net capacity 9.3GW as of March 2018. Of this, 26% of its capacity is based in the Middle East.
Mitsui has a longstanding relationship with Oman dating from 1979, and has been contributing to economic and industrial development in Oman through various projects.
ACWA Power
ACWA Power is a developer, investor and operator of a portfolio of power generation and desalinated water production plants currently with presence in 10 countries including in the Middle East and North Africa, Southern Africa and South East Asia regions. ACWA Power’s portfolio, with an investment value in excess of USD 30 billion, can generate 22+ GW of power and produce 2.7 million m3 /day of desalinated water to be mostly delivered on a bulk basis to state utilities and industrial majors. ACWA Power operates these plants through its wholly owned subsidiary NOMAC.
ACWA Power entered Oman through its acquisition of AES’s shares in the Barka 1 IWPP (ACWA Power Barka) in 2010. Subsequently, ACWA Power has worked with ACWA Power Barka to develop, finance and construct an additional 22.5 MIGD of water capacity to meet the growing demand for water in the Muscat region. ACWA Power, through its’ initiatives, has set new benchmarks in plant performance, reliability and HSE which has translated into strong value creation for the shareholders for its assets in Oman.
DIDIC
Established in 1987 and one of the largest investment companies in the Sultanate of Oman, Dhofar International Development & Investment Holding Company SAOG (“DIDIC”) has made significant contributions to the economy of the Sultanate of Oman, especially the Dhofar governorate. Since its inception, DIDIC focused on diversification of its activities to cover various economic fields, and accordingly established a bank in Oman, a financial services company, insurance company and tourism company. It also played an essential role in the development of Dhofar University and Salalah Port Services. The company has had an important role in the inception of various factories and industrial plants in the Sultanate. DIDIC has paid up capital of OMR 24.64 Million with total assets of OMR 230 Million and is listed in the Muscat Securities Market.
In addition to the development of DGC, Mitsui, ACWA Power and DIDIC have continued to demonstrate their commitment to the Omani power sector. The consortium has been awarded Oman’s largest single tendered independent power project, the 3,319 MW Ibri Sohar-3 power generation scheme which consists of two natural gas-fired cycle power plants of 1,509 MW and 1,710 MW respectively at Ibri and Sohar in the northern part of the country.
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