Musandam Power Company IPO set for next month

SUBSCRIPTION: The IPO of 28 million shares will be offered in two phases and the subscription period for the first phase is November 3 – 7, 2019

Musandam Power Company (MPC), which owns and operates the first gas-powered power plant in Musandam Governorate, will offer 40 per cent of its share capital in the form of an Initial Public Offering (IPO) via a listing on the Muscat Securities Market next month.

It follows a decision by the Capital Market Authority (CMA) approving MPC’S prospectus for the IPO, which will be offered in two stages as part of a ‘book building’ process – the first time it has been deployed in an IPO issued on the Muscat bourse, according to a Muscat-based market analyst.

“What makes the IPO particularly unprecedented and interesting is the application of the ‘book-building’ mechanism for the first time in a public offering on the MSM,” said Hettish Karmani, Head of Research at U Capital, the Sultanate’s leading investment banking platform.

“Book-building is typically a process whereby the book runner sets the price range in the first phase at which the IPO will be offered to the institutions. Institutions bid for IPO within the range given and the price discovery is done, following which the same price is offered to retail in the second phase,” Karmani explained.

In a series of tweets on Sunday, the CMA announced that the IPO of 28 million shares will be offered in two phases. In the first phase, around 14 million shares will be offered within the price range of 260 bz to 325 bz per share. The subscription period for the first phase is November 3-7, 2019, it said. In the second phase, the remaining 14 million shares will be offered at a fixed price to be announced upon the completion of the first phase.

The subscription period covering the second phase will be announced on November 12, the Authority said, citing the company’s prospectus.

Musandam Power Company (MPC) is a joint venture between Oman Oil and Orpic Group – the Sultanate’s integrated energy powerhouse with a 70 per cent stake — and LG International Corp (30 per cent).

The company’s 120 MW capacity power plant — the first Independent Power Project (IPP) in the strategically important enclave — came into operation in July 2017.