• Phoenix Power Company’s initial public offering is 18 times oversubscribed
  • Phoenix Power owns Sur independent power project

The initial public offering (IPO) for Oman’s Phoenix Power Company was 18 times oversubscribed when the subscriptions closed on 8 June.

Phoenix Power owns Oman’s largest independent power project (IPP), the 2,000MW Sur facility.

Total subscriptions exceeded RO1bn ($2.6bn), or 9,137 million shares, according to Oman News Agency.

Phoenix Power is listing 512 million shares on the Muscat Securities Market (MSM) at RO0.11 each.

A total of 333 million shares, or 65 per cent of the offer, will be distributed to category 1 investors and 179 million shares to category 2 investors, to ensure smaller investors are allocated a fair proportion.

The shares will be allocated on 21 June and will begin trading on the MSM the following day.

IPP offerings in Oman generally attract a high level of interest and are known for good listing gains. According to the local Al-Maha Financial Services, the shares could rise 30 per cent to RO0.14.

Following the IPO, Axia Power, part of Japan’s Marubeni, will own 32.5 per cent of the shares. Japan’s Chubu Electric will own 19.5 per cent, Qatar Electricity & Water Company will own 9.8 per cent and Multitech, part of the local Bahwan Group, will own 3.2 per cent.

The consortium was awarded the project in 2011, and the IPP has been in full commercial operation since December 2014.

It has a 15-year power purchase agreement (PPA), but the plant has a useful life of 40 years and it may be extended. The company is expecting a 7 per cent yield.

The financial adviser is Bank Muscat Investment Banking, with five other local and regional banks acting as collectors. The legal adviser is the local Al-Busaidy, Mansoor Jamal & Company.

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