MCDC share sale roadshow evokes investors’ interest

MCDC IPO

Following the launch of the initial public offering (IPO) of Muscat City Desalination Company (MCDC) SAOG (under transformation), investors’ interest is gathering pace.

The company, alongside its issue manager – Bank Muscat Investment Banking, held an IPO roadshow with key investors, as well as research analysts from brokerage houses. Investment opportunities in IPOs of the power and water sector in Oman have traditionally attracted strong investor interest, and the IPO offering from MCDC is also generating great interest from investors.

The roadshow meetings, which commenced on November 20 in Muscat and Salalah, were well attended by a wide cross-section of investor groups, including institutional investors, high-net worth individuals and established family offices.

Through these meetings, MCDC’s management has presented key investment highlights, which include a stable business model resilient to changes in water demand and electricity costs, experienced project founders (Sumitomo from Japan, Malakoff from Malaysia and Cadagua from Spain), as well as diverse and experienced management team. The strategic importance of the plant is the largest in Oman, having a relatively higher projected dividend yield compared with other companies listed in this sector.

“We are proud to construct a strategic water asset for Oman, which caters to approximately 60 per cent of the installed water desalination capacity in Muscat. Founding shareholders’ expertise in operating similar plants in the region and across the globe is reflected through the fact that the combined water production capacity across the globe, managed by the founding shareholders, is more than eight times the capacity installed in the Sultanate,” said Tamer Cankardes, deputy chairman.

“We are delighted with both the investors’ turnout and the interest shown during the IPO roadshow. The roadshow is providing great experience to meet potential investors across Oman, share MCDC’s key investment highlights and address investors’ queries,” remarked Subrina Thiagarajah, CEO of MCDC.

“The quality of discussions with the potential investors reflect their sound understanding of the inherent strengths of the sector, as well as their deep interest in the investment opportunities in this sector,” the CEO added.

MCDC is offering 54,442,640 shares at a price of 116 baisas (comprising a nominal value of 100 baisas, premium of 14 baisas and offer expenses of 2 baisas). The IPO represents an offer of 35 per cent of the share capital of the company.

The IPO offer period ends on December 18, 2017, and the shares are expected to be admitted for trading on the Muscat Securities Market (MSM) on or around January 2, 2018.

At the IPO price, the company is projecting an average dividend yield of 8.3 per cent for the first five years (excluding issue expenses), with the first dividend expected to be announced in February 2018, and twice yearly thereafter.

Subscription

The application form for the IPO is available for collection at any branches of the subscription banks: Bank Muscat, National Bank of Oman, Oman Arab Bank, Bank Dhofar, Bank Sohar and Ahli Bank.


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