x Abu Dhabi, UAEWednesday 26 July 2017

Oman utility's stock advances on first day trading on market

SMN Power Holding, Oman's largest single electricity provider, saw its shares climb more than 3 per cent following its listing on the Muscat Securities Market.

SMN Power Holding, an Omani electricity company part-owned by Mubadala Development, advanced on its first trading day since listing on the Muscat Securities Market.

The stock ended the day at 3.63 Omani rials, up 3.1 per cent from the initial public offering (IPO) price of 3.52 rials per share.

The IPO, which had been planned since the company was formed five years ago, was 1.7 times subscribed, according to a statement from one of the company's biggest shareholders, meaning that investors placed orders for 70 per cent more shares than were available.

The IPO comes during a dearth of new stock listings in the region amid stagnant trading volumes and sagging stock prices. But while investor appetite is far from healthy, Johan Van Kerrebroeck, the chief executive of SMN Power, told The Nationalthis year that demand for power in Oman "has grown by 6 to 7 per cent per annum in recent years and is expected to grow even further", making the company a safe investment.

The listing, the first in Oman this year, "attracted strong interest from mainly regional investors", according to a statement from International Power, one of the company's main shareholders through a subsidiary called Kahrabel. The other partners in the joint venture are Oman's National Trading Company and Mubadala, a strategic investment company owned by the Abu Dhabi Government.

"The IPO validates International Power's strategy of developing solid, long-term partnerships such as the joint venture we have built with our partners in SMN Power Holding," Shankar Krishnamoorthy, the president and chief executive of International Power in the Middle East, said in a statement.

The IPO brought 35 per cent of SMN Power Holding to the public market, with the remaining 65 per cent still in the hands of the partners that formed the joint venture in 2006.

Prior to the listing, Mubadala held 47.5 per cent of SMN Power Holding, which became the single largest electricity provider in Oman by purchasing generating facilities in a government privatisation and by building its own generating facilities. Mubadala would own 30.8 per cent of the company after the IPO, according to a prospectus.

The listing raised 40.9 million Omani rials (Dh390m) versus an original target of 24.6m rials, according to an International Power statement.

afitch@thenational.ae