Investor interest is gathering momentum following the successful launch of the Initial Public Offering (IPO) of Dhofar Generating Company (DGC) SAOG (under transformation).
The company, alongside its issue manager Bank Dhofar – Investment Banking Division and global coordinator and bookrunner EFG Hermes UAE Limited, held a roadshow meeting with key investors, analysts, and brokerages on Wednesday.
The meeting, held in Muscat, was well-attended by a wide variety of investor groups including institutional investors, high-net worth individuals, and established family offices. Senior members representing the founding shareholders of the company, along with the management team of DGC composed of its CEO and CFO, interacted with investors and analysts and provided insights into the various aspects of the offer.
“DGC (Salalah II IPP) comprises two power generation plants with a combined capacity of 718MW and is the largest power producer in the Dhofar governorate of Oman,” John Clark, Board Chairman of DGC, said at the event. “The company is producing an essential utility that is the cornerstone of growth for communities, businesses, and industries in the region.”
“DGC has already established a reputation for excellence with the landmark achievement of the commercial operation date of the 445MW power plant as per the scheduled timeline, and the plant is recording over 99 per cent reliability since the acquisition of the existing plant in June 2015 and commencement of operations of the new plant in 2018,” he added.
“The offer has attracted significant interest amongst the investor community in Oman, which reflects the key highlights of the offering: an attractive and robust sector, strong and reputed founding shareholders, steady and reliable cash flows unrelated to power demand, and a dividend yield that compares well to the peers in the industry,” Naif Al Awaaid, CEO of DGC, said about the positive response to the IPO.
“DGC has the backing of its project founders with an established track record in the global and regional power industry,” elaborated Al Awaaid on the strength of the offer. “The project founders, Mitsui, ACWA Power, and Dhofar International Development & Investment Holding Company (DIDIC), will remain shareholders post-IPO with an aggregate holding of 60 per cent and will continue to ensure reliable management and governance of the company. We are very pleased with the strong interest and enthusiasm surrounding the IPO of DGC.”
DGC is offering 88,896,000 shares at a price of 259 baisas per share, comprising a nominal value of 100 baisas, premium of 157 baisas, and offer expenses of 2 baisa per share. The IPO represents an offer of 40 per cent of the share capital of the company.
At the IPO price, the company offers an average projected dividend yield of 7 per cent for the first five years, excluding issue expenses. The first dividend of 9 baisas per share is expected to be paid in February 2019 while 9 baisas per share will be paid in August 2019, with twice-yearly dividend declarations thereafter.
The IPO will close on July 30, 2018.
Application forms for the IPO are available for collection at any branches of the subscription banks: Bank Dhofar, Bank Muscat, National Bank of Oman, Oman Arab Bank, Bank Sohar, and Ahli Bank.
-Times of Oman