One of the biggest Initial Public Offering (IPO) in over a decade in Oman, Abraj Energy Services (“Abraj”) will sit among the most prominent public joint stock transformations in the nation when its IPO opens on February 20, 2023.

This comes following a Capital Market Authority (CMA) approval for the stock prospectus of Abraj Energy Services SAOC, a subsidiary of OQ Group, to proceed with its transformation from a closed joint stock company to a public joint stock company.

As a result of this transformation, the company will be offering 377,398,000 shares for public subscription – and these shares will be made available in two parallel categories:

The first category will be reserved for major investors and will consist of a maximum of 85 per cent of the total offering. This category will be directed towards major and corporate investors in Oman as well as international investors. The subscription price for this first category will be set within the range of 242 baizas to 249 baizas per share.

The second category of shares, intended for small individual investors within the Sultanate of Oman, will make up no less than 15 per cent of the total public offering. These shares will be offered at a maximum discounted price of 224 baizas per share, calculated as 249 baizas minus a discount of 10 per cent.

Abraj Energy Services has informed the public that its stock prospectus and details regarding its initial public offering have been furnished at the Muscat Stock Exchange (MSX).

The public offering for the first category of shares is expected to take place between 20 February and 2 March 2023, while the subscription period for the second category will run from 20 February until 1 March 2023.

During this subscription period, 49 per cent of Abraj’s issued capital will be sold, as per a statement issued by the Oman News Agency. The selling shareholders reserve the right to modify the offering at any time before the end of the underwriting period at their discretion and in accordance with applicable laws, following approval from the CMA in Oman.

What Is Abraj Energy Services

Why The Abraj Energy Services IPO Is Important To Oman

Abraj has reportedly secured the involvement of the Saudi Arabian sovereign wealth fund and energy services giant Schlumberger, as anchor investors for its initial public offering (IPO).

These anchor investors, which include Schlumberger Oman & Co, Royal Court Affairs and the Saudi-Omani Investment Company (a wholly-owned entity of the Public Investment Fund), have agreed to invest a total of RO37.58mn, accounting for 40 per cent of the total offer size.

Following admission, their shares will be subject to a 90-day lock-up period.

The Offering comes at a critical moment in Oman’s history. It is indicative of Oman’s outward-facing, modern economy, providing opportunities for foreign investment that is fundamental to the country’s ability to build an even brighter future.

Abraj will play a crucial role in developing this future. Through innovation, research and development, the Company will seek to leverage its advanced drilling capabilities to capitalise on the MENA region’s ability to meet the world’s demand for oil and natural gas. Abraj is dedicated to ensuring that this long-term journey is one of responsible growth.

Abraj’s Board, management, and highly trained employees are committed to upholding our high standard of operations and are ready to provide value to our shareholders with an ambition of delivering consistent, strong returns.

The Abraj IPO is a moment to celebrate the Company’s historic successes while preparing for an ambitious future that’s focused on modernisation, innovation, and a commitment to excellence.

– Ayad Al Balushi, Board Chairman, Abraj

 

The Company proposes to pay yearly dividends, subject to debt repayments and covenants, working capital requirements, operational expenditure obligations, growth plans and the necessary approvals.

In 2023, the Company intends to pay a dividend of RO15.4 million for the year ended 31 December 2022. In 2024, the Company intends to pay a dividend which is the higher of 85 per cent of the net profit for 2023 or a six per cent increase on the dividend paid in 2023.

In 2025, the Company intends to pay a dividend which is the higher of 85 per cent. of net profit for 2024 or six per cent. increase on the dividend paid in 2024. The size of annual dividends and the determination of whether to pay dividends in any year may be affected by a number of factors, including but not limited to the Company’s business, financial condition, results of operations and prospects (including the prospects of the oil and gas sector).

Ahli Bank, EFG-Hermes UAE Limited, and National Bank of Oman have been appointed as joint global coordinators for the Abraj IPO, with Ahli Bank and National Bank of Oman serving as issue managers.