The Initial Public Offering (IPO) of Abraj Energy Services, a subsidiary of OQ, the Global Integrated Energy Group, enters its second week on Monday and ends on 1st March 2023 for the small investor category, while the large investors subscription ends on 2nd March 2023.
As part of its IPO introductory sessions tour, the company organised its last introductory meeting on Sunday, in cooperation with the branch of the Oman Chamber of Commerce and Industry in Dhofar Governorate. The session highlighted the detailed offerings of Abraj shares. The sessions fall under the IPO introductory meetings in the Governorates of A'Sharqiyah South, Al Batinah North, and A’Dakhiliyah, in addition to a session organised in cooperation with the Muscat Stock Exchange (MSX).
Speaking on the occasion, Sheikh Nayef bin Hamid Beit Fadil, a member of the Board of Directors of the Oman Chamber of Commerce and Industry, Chairman of the Board of Directors of the Chamber's branch in Dhofar Governorate said, "We appreciate the efforts of the Omani Investment Authority to exit certain government assets and the importance of attracting national and foreign investment to Oman. This, in addition to expanding the ownership base of government companies, is vital for stimulating the national economy”. He noted that “these efforts reflect the objectives of Oman Vision 2040 and the success of the country's economic diversification policies”.
“These steps also enable the private sector to play a greater role in the national economy in the future and the transformations it brings on the national, regional and international level. It is necessary to keep pace by further enabling the private sector to take the lead in the economic environment, and maintain the Government’s role as an organiser, supervisor and performance monitor”, he added.
He also noted, "The listing of existing government assets is an aspect preferred by some investors, due to the speed of returns on their investments, as well as the availability of meaningful economic incentives to invest, it must therefore be accorded important by facilitating certain government assets, and recycling capital into feasible projects and investments that require significant capital.”
Eng. Saif Al Hamhami, Chief Executive Officer of Abraj Energy Services said that by listing its shares for the public offering, the company aims to build a strategic partnership with local, regional, and international investors. This implements the company's expansion plans and diversifies the portfolio of services and solutions provided to clients.
A total of 377,398,000 shares, equivalent to 49% of Abraj's total equity capital, have been released. Musandam Gas Plant LLC, Oman Oil Company Exploration & Production LLC (OOCEP), OQ Exploration and Production LLC, the Selling Shareholders, reserve the right to amend the size of the offering at any time prior to the end of the subscription period in their sole discretion, subject to applicable laws and the approval of the CMA.
Al Hamhami added that the offering is divided into two categories; corporate category for large investors, and the second category is retail category for small investors. The subscription price in small investor category 224 Baisas per share, reduced by 10 percent of the share price, while the share price for the first group is the founding investor 242 Baisas, the lowest underwriting ratio for the small investor group is 1000 shares, and 803,000 shares for the large investor category.
During the subscription timeline, Al Hamhami noted that the minimum subscription for the first category is 803,000 shares and then multiples 100 shares thereafter, while the minimum for the second category is 1,000 shares and then multiples of 100 shares thereafter. He pointed out that the offering was conducted based on the Capital Market Authority approval.
Al Hamhami noted that Abraj is one of the largest leading companies operating in the oil and gas sector, with high profitability which makes it an attractive destination for local and regional investors. It has distributed profits to stakeholders for more than 10 years, achieving record earnings figures with an increase of more than 100% from 2019 to 2021 despite market volatility and the Coronavirus pandemic.
It achieved outstanding performance for the fiscal year ended December 31, 2021, with revenues of OMR 125 million (US $322 million) and a CAGR of 23% between 2007 and 2021.
The company plans to pay a dividend of OMR 15.4 million during 2023 for the financial year ended December 31, 2022, or 20 Baisas per share. It also intends to pay a dividend in 2024 that is 85% higher than the net profit for 2023, or 6% higher than the dividend paid in 2023.
In 2025, Abraj plans to pay a dividend 85% higher than the 2024 net profit, or a 6% increase from the 2024 dividend.
Al Hamhami explained that Abraj owns one of the latest drilling fleets in the Middle East, as well as being the first local company in the Middle East and North Africa to enter in the field of integrated fracking services.
Abraj invested in 11 new drilling platforms. The Company has also secured a contract in Kuwait for five years, and an optional period of additional two years to provide 3 drilling rigs with the start of the project in 2024.
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