Muscat City Desalination to launch IPO this month

MUSCAT, NOV 1 – Muscat City Desalination Company SAOG (under transformation) (MCDC), owner of the Ghubrah Independent Water Plant (Ghubrah IWP), Oman’s largest operating water plant, today announced its intention to launch its Initial Public Offering (IPO) in mid-November 2017. As stated in the Project Founders’ Agreement, the founders are required to offer 35 per cent of their share capital to the public through an IPO. Accordingly, 54,442,640 Offer shares are on offer to the public through listing on the Muscat Securities Market. Bank Muscat Investment Banking, Oman’s largest and most experienced investment banking team, is the financial adviser and issue manager for the IPO exercise.
Promoted by global leaders with vast experience in the water industry: Malakoff International (Malaysia), Sumitomo Corporation (Japan) and Cadagua SA (Spain), Muscat City Desalination Co, (MCDC) is the owner of Oman’s largest water plant contributing to about 24 per cent of total water capacity in the Interconnected Zone.
MCDC owned plant with proven desalination technology is a strategic asset located in Muscat. MCDC has long-term contracted water purchase agreement until 2034 with government owned Oman Power & Water Procurement Company, ensuring stable and predictable cash flows. On the back of this contracted water purchase agreement, MCDC plans to offer an attractive dividend yield to IPO investors, further details of which would be shared by the Company upon obtaining the final approvals from Capital Market Authority.
MCDC is a proud player in Oman’s utility industry and contributing to the wellbeing of its residents by providing one of life’s most precious and vital ingredients i.e. potable water. Oman’s daily water demand has been growing by about 2-3 per cent per year, and has been notably increasing in the metropolitan area centred on Muscat. To meet the increasing needs, the Government of Oman launched a competitive bidding process in 2012 for multiple IWPs (Independent Water Projects). Following their successful bid, its shareholders incorporated MCDC to undertake the Project. The Plant has now successfully completed a year of production since its COD (Commercial Operation Date) on February 19, 2016.
Commenting on the proposed IPO, Subrina Thiagarajah, CEO of MCDC said: “This is a very exciting phase for MCDC. The company’s plant, Ghubrah IWP, has been successfully securing the water needs of Muscat and its residents for over a year. The IPO is a unique opportunity both as an investment in the Sultanate’s largest operating desalination plant, and in an essential commodity that is a part of everyday life.”
The Plant provides about 24 per cent of the total water capacity of the Interconnected Zone and its unique location at the heart of the city, combined with proven technology, an expert team and good availability, helps the company deliver uninterrupted water supply with minimum outages. The plant has been built with a total investment of RO 103 million, with a total capacity output to deliver 42 million gallons of potable water every day.
Subrina Thiagarajah, added: “MCDC, with the Ghubrah IWP, makes a valuable contribution to Muscat and Oman, through the provision of water to the people and industries. IPOs in the water sector in Oman have been a rare opportunity, but have a proven track record, with strong demand and growth projections. The MCDC IPO offers a unique opportunity for a diversified investment in an industry that is shaping a young and modern metropolis.”