New lease of life for Omani state-owned glass container maker

MUSCAT, JAN 10
The recent decision by the Board of Directors of majority state-owned Majan Glass SAOG to approve an offer for its acquisition by an Omani investor represents a potential new lease of life for the loss-making, publicly traded company.
Established in 1997, the factory located in the Sohar Industrial Estate became the Sultanate of Oman’s first major glass container manufacturing facility, producing glass bottles and jars for the soft drinks and food and beverage industries, serving both domestic and export markets. As of end-2024, the state sovereign fund Oman Investment Authority (OIA) held 88.21 per cent of the company’s shares.
However, Majan Glass’s outlook has been weighed down by years of recurring operational losses, persistent cash deficits, a negative adjusted net asset value and material uncertainty over its ability to continue as a going concern. As at December 31, 2024, the company’s accumulated losses stood at RO 6.373 million, fully eroding its share capital.
Against this challenging backdrop, Emerald National Investment SPC (ENI) — part of Makaseb Investment LLC — announced an offer last month to acquire 100 per cent of Majan Glass’s issued share capital. The offer values the company at RO 0.004 per share, covering a total of 42.03 million fully paid-up shares.
At its meeting earlier this month, the Majan Glass Board approved the acquisition offer, taking into account commitments by the offeror to continue the company’s principal commercial activities and work towards enhancing performance and operational efficiency, without adversely affecting employees or existing contractual obligations.
The Board also considered an assessment by independent adviser Vision Capital, which concluded that Majan Glass had incurred recurring operational losses in recent years, was highly indebted with limited liquidity and had a negative net worth due to accumulated losses. The valuation analysis highlighted material uncertainty over the company’s ability to continue as a going concern, with an independent valuation on an adjusted net asset value, non-going-concern basis indicating negative equity. Despite extensive efforts to engage potential investors and buyers; and due diligence conducted by some parties, no competing offer superior to the ENI proposal was received.
In its most recent annual results, Majan Glass attributed its losses to a combination of factors, including market disruptions in the Levant due to geopolitical tensions, inflationary pressures that dampened demand in European markets, higher interest rates and elevated raw material prices. Sales were also affected by the ongoing boycott of some international carbonated beverage brands in certain markets, as well as higher shipping costs linked to disruptions in the Red Sea.
Looking ahead, prospects for switching to locally produced, cost-competitive raw materials may improve following an agreement signed by Minerals Development Oman (MDO) — a subsidiary of OIA — for the commercial development of glass-grade silica sand deposits in Block F 51 in Al Wusta Governorate.