Barka Desalination Company (BDC), the owner of Barka Independent Water Project (IWP), the largest seawater desalination plant in Oman, has planned to launch its Initial Public Offering (IPO).
The Company will offer 40 percent of its share capital to the public through an IPO. Accordingly, BDC will offer 30,208,800 shares to the public through listing on Muscat Stock Exchange (MSX).
National Power & Water, an investment arm of Bahwan Engineering Group, and Bank Muscat have committed to invest as anchor investors in the IPO up to 10 percent of the IPO at Bzs 145 per share, which is the highest end of the IPO price range.
BDC has been backed by global leaders with vast experience in the water industry, such as, the ITOCHU Corporation from Japan, ENGIE and SUEZ from France along with the WJ Towell Group from Oman.
BDC caters to c. 23 percent of water demand in the Oman, with its proven desalination technology assets located close to Muscat and is thereby a key water supply unit for Muscat city and northern part of the Sultanate. It generates its revenues through a twenty-year contracted water purchase agreement (WPA) until 2038 with the Government of Oman-owned Oman Power & Water Procurement Company (OPWP), ensuring stable and predictable cash flows.
The company intends to issue the shares in the IPO on a book-building basis at a price range of Bzs 115 to Bzs 145, resulting in an attractive dividend yield of 8.4 percent to 10.6 percent per annum for IPO investors.
Mr. Patrick Thienpont, CEO of BDC, said that “Barka Desalination Company officially commenced commercial operations in June 2018 after the remarkable construction of the Barka IWP plant, which was completed in less than 30 months. The IPO is a unique opportunity to invest in a strategic asset that will continue to be held and managed by the marquee founders. We look forward to welcoming new partners in our future journey.“
Barka IWP uses Sea Water Reverse Osmosis (SWRO) desalination technology to provide an ecofriendly and sustained supply of high-quality drinking water while consuming a record low amount of electrical energy. In the last twelve months, the Plant has delivered great operational results with over 99 percent reliability.
The BDC IPO will be the first in Oman under the Capital Market Authority’s (CMA) Rules for Pricing Mechanisms in Public Offerings of Shares, which were implemented last year.
