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Abraj Energy to offer 49% in IPO on MSX

Strong performance: Subscription period is expected to commence in February, after receiving CMA approval

MUSCAT: Abraj Energy Services SAOG (under transformation) – part of OQ Group – announced on Sunday, January 22, its intention to proceed with an initial public offering (IPO) and listing on the Muscat Stock Exchange (MSX), which is expected to take place in March 2023.

The announcement came at a media briefing hosted by the MSX where officials said the planned listing will allow investors to gain exposure to a leading onshore oil and gas field services provider in Oman, with a wide service offering including drilling, workover and well services.

The offering, representing up to 49 per cent of Abraj's total issued share capital, amounts to the divestment of shares currently held by the selling shareholder, OQ. A minimum of 51 per cent shareholding will continue to be indirectly held by OQ.

The Offering is being offered to eligible investors in the Sultanate of Oman and eligible international investors outside the United States (the Phase I Investors' and to retail investors in Oman (Phase Il Investors"). The subscription period for Phase I and Phase I investors is expected to commence in February, after receiving the required approval from the regulator. Admission of the shares to trading on the MSX is expected in March 2023.

The Offering will be conducted in two tranches, being carried out concurrently as defined below: (I) Institutional offering (Phase I) represents a maximum of 85 per cent of the total Offering, and will be made to eligible investors in Oman and international investors outside the United States Retail offering (Phase II) represents a minimum of 15 per cent of the total Offering, and will be made to retail investors.

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(II) If there is excess demand from retail investors, the Phase Il offering may be increased up to a maximum of 35 per cent of the total Offering size in line with the regulatory requirements, and the Phase I offering will be reduced in size accordingly. Alternatively, if the aggregate demand from retail investors in Phase I is less than 15 per cent of the Offer, then after full allocation to retail investors, the balance of the shares shall be made available to institutional investors in the Phase I offering, if there is oversubscription in Phase I.

Commenting on the announcement, Ayad al Balushi, Chairman of the Board of Directors, Abraj, said: "Through its commitment to technological innovation and quality services, Abraj has earned its place as one of the leading Omani onshore oilfield drilling and well services companies. We are confident that Abraj is now well positioned to enter its next phase of growth as a publicly listed company on the Muscat Stock Exchange and look forward to welcoming our new shareholders on our growth journey."

Saif al Hamhami, CEO of Abraj, added: "Throughout economic cycles, Abraj has demonstrated remarkable resilience, delivering strong financial performance and growth and ongoing innovation in new drilling technologies and well services. These are fundamentally important attributes as we look to an ambitious future of continued leadership in Oman and a corporate strategy that leverages the Company's long-standing relationships and diverse customer base.

Through this Offering, we believe investors have an opportunity to gain exposure to a profitable, growing Company with one of the MENA region's youngest drilling fleets. We believe the Company's future is very bright, not least because it is already prequalified in four countries to conduct a range of services, setting the stage for international expansion geared towards delivering growth and shareholder value.”

Ahli Bank, EFG-Hermes UAE Limited (acting in conjunction with EFG Hermes UAE LLC) and National Bank of Oman have been appointed as Joint Global Coordinators, and Ahli Bank and National Bank of Oman have been appointed as Issue Managers.

Abraj is the leading and largest drilling contractor in Oman by contracted operating drilling rigs', with 29 per cent market share. The Company has a diverse service offering, including drilling, workover and well services which includes fracturing, cementing and coiled tubing. It is also a regional pioneer in using integrated hydraulic fracturing services to further the development of unconventional deep tight oil and gas in Oman.

Abraj had RO 593mn (USD$1.5bn) worth of order backlog for the years 2023 through 2031 as at September 30, 2022, equivalent to more than the last five full years of revenue. Abraj boasts strong revenue - for the year ended December 31, 2021, the Company earned RO 125mn ($323mn) from contracts with customers and had a CAGR of 23 per cent from 2007 to 2021, supported by growth in its drilling rig fleet.

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