Everything you want to know about the OQGN IPO

OQ Gas Networks SAOG (under transformation) announced on Monday the price range and details of the subscription period for its initial public offering (IPO) on the MSX.

• The offering comprises of the sale of a total of 2,122,005,720 existing shares by OQ SAOC (OQ) directly and indirectly through Oman Energy Trading Company Limited (OETCL) and Oman Oil Services Limited (OOSL) – together known as the selling shareholders - representing 49 per cent of OQGN’s total issued share capital.

• The Offering will include a Category I offer for Institutional investors representing 40% of the total offer size, a sale to Anchor Investors representing 30% of the total offer size and a discounted Category II Retail offer representing the remaining 30%

• Subscription price for the Category I offer will be between Bzs 131 and Bzs 140 per share with the final price to be set through a bookbuilding exercise. Subscription price for the Category II offer to be set at a maximum discounted price of Bzs 126 per share, calculated as the maximum price of Bzs 140 per share less a discount of 10 per cent.

• Significantly, three Anchor Investors - Saudi Omani Investment Company, a wholly owned entity of the Public Investment Fund, Falcon Investments LLC, a subsidiary of Qatar Investment Authority, and Fluxys International SA/NV - have irrevocably committed to subscribe to the Offering at Bzs 140 per share, subject to the terms contained in their respective anchor investment agreements. They are each taking 10 per cent of the Offer.

• The offer is expected to raise up to RO 297 million (equivalent to $771 million) at the top of the price range, valuing OQGN at up to RO 606 million (equivalent to $1.574 billion.

• Subscription periods open on September 26, 2023 with the Category I offer closing on October 9, 2023 and the Category II offer closing on October 5, 2023

• OQGN shares are expected to commence trading on the MSX on or around October 24, 2023.

Talal al Awfi, OQ Group Chief Executive Officer and OQGN Chairman, said: “We are immensely proud of this milestone and look forward to the launch of the IPO subscription period. OQGN has a compelling story, a track record of consistent delivery and is now taking a significant step forward to its next phase of growth."

Mansoor al Abdali, Managing Director of OQGN, said: “We are confident in our position as the exclusive operator of gas transportation network in Oman and in our ability to provide critical infrastructure for both our domestic and international partners. Since announcing our intention to float on the MSX, we are pleased to see our strong position and performance reflected by significant interest from investors including our three, globally renowned, anchor investors. We believe that OQGN represents an attractive investment proposition, and we are excited for what is to come.”

Muteb al Shathri, Acting CEO of the Saudi Omani Investment Company, said: "The company’s high cash flow visibility, underpinned by a robust regulatory environment and experienced leadership team were critical in determining our investment in OQGN. We are pleased to underline our commitment to the investment by securing an anchor position in the forthcoming IPO. We have confidence in OQGN’s development and trajectory, as well as in Oman as an attractive investment destination and are excited to be part of the largest IPO to date on the Muscat Stock Exchange. This investment underscores our commitment and our long-term investment strategy for Oman."

Mansoor Ebrahim al Mahmoud, CEO, QIA, said: “We are proud to partner with OQGN in its IPO and recognise the critical role OQGN plays in connecting gas producers and customers as part of Oman’s broader infrastructure network. QIA recognizes OQGN’s strong growth potential through further network expansion and adaptation to renewable energy sources."

Pascal De Buck, Chief Executive Officer, Fluxys, said: “This investment aligns perfectly with our strategy to develop low carbon energy value chains through partnerships. As Oman will become a leading export hub for renewable hydrogen, it’s a unique opportunity for Fluxys to play a key role in accelerating the energy transition and bringing renewable hydrogen to Belgium and Europe.”

The Selling Shareholders intend to offer up to 49% of OQGN’s total share capital. Immediately following the Offering, a minimum of 51% shareholding will continue to be held by OQ.

• Category I Offer: 848,802,288 Offer Shares have been allocated for Category I applicants, as follows: (a) 20 per cent of the Offer Shares (equivalent to 50 per cent of the Category I Offer Shares i.e., 424,401,144 Offer Shares) shall be reserved for subscription by Local Applicants. The allocation of Offer Shares to Local Applicants shall be made on a proportionate basis. Applicants for Offer Shares in the Category I Offer for can apply for a minimum of 100,000 Offer Shares and in multiples of 100 thereafter. (b) 20 per cent of the Offer Shares (equivalent to 50 per cent of the Category I Offer Shares i.e., 424,401,144 Offer Shares) shall be available for subscription by Non-Local Applicants. Allocation of Offer Shares to Non-Local Applicants shall be determined by the Selling Shareholders in consultation with the Joint Global Coordinators.

• Anchor investors: 636,601,716 Offer Shares have been allocated for Anchor Investors, being 30 per cent of the Offer. In this respect, the Company has received irrevocable commitments from the Saudi Omani Investment Company, a wholly owned entity of the Public Investment Fund of the Kingdom of Saudi Arabia, Falcon Investments LLC, a subsidiary of Qatar Investment Authority, the sovereign wealth fund of the State of Qatar, and Fluxys International SA/NV. The anchor investors have, in aggregate irrevocably committed RO 89,124,240 to the IPO representing a purchase price of Bzs 140 per share, subject to the terms contained in their respective anchor investment agreements.

• Category II Offer: 636,601,716 Offer Shares have been allocated for Category II, being 30 per cent of the Offer (allocation to Category II Applicants to be made on a proportionate basis). If the aggregate demand in Category II is greater than 30% of the Offer Shares, the CMA may decide that a minimum number of Category II Offer Shares be distributed equally among Category II Applicants, and the remaining Category II Offer Shares shall be allocated on a pro-rata basis. Applicants for Offer Shares in the Category II Offer for can apply for a minimum of 1,000 Offer Shares and in multiples of 100 thereafter. If the aggregate demand in Category II is less than or equal to 30 per cent of the Offer, then after full allocation to the Category II Applicants, the balance of the Offer Shares will be made available to the Category I Applicants in the respective proportion outlined above for allocation at the Offer Price, if there is oversubscription in Category I.