Omantel divestment over 2 stages

2/4/2014 1:01:29 PM

(MENAFN- Muscat Daily) Following the sale of a 30 per cent stake in Oman Telecommunications Co (Omantel) in 2005, the Government of Oman will divest a further 19 per cent, or 142.5mn shares, of the issued share capital of the telecom-service provider in two phases â€“ a private placement open to Omani individuals and institutional investors, followed by a public offer open for subscription to Omani individuals â€“ to be completed over the next eight to ten weeks.

The proposed divestment will effectively reduce the government's holding from 70 per cent to 51 per cent.

''The government had commenced the process with the appointment of bank muscat as the financial advisor to ensure that a transparent and professional approach is adopted,'' said Saud al Shukaily, secretary-general for taxation at the Ministry of Finance and chairman of the supervisory committee overseeing the Omantel divestment.

''In conjunction with the financial advisor, as also following discussions with the Capital Markets Authority, the government has arrived at an optimum strategy to meet its objectives. Based on this strategy, the government has decided to split the share sale process into two phases,'' Shukaily said on Tuesday in a ministry press release.

''Phase one will involve a private placement to Omani institutional investors and Omani individuals investing more than RO2mn, based on a book building and auction approach. The private placement is expected to be completed in March 2014,'' said Shukaily, adding, ''Phase two will be launched upon completion of the private placement process, and will involve a public offer open for subscription to Omani individuals.''

On the intended time frame for the completion of the proposed sale, he said, ''Considering the current transaction timetable and readiness, the favourable liquidity in the economy, and investor interest in Omantel, the government believes that the current phase of the Omantel privatisation should be completed over the next eight to ten weeks.''

Saud al Shukaily

Speaking about the expected pricing of shares under the latest offering, Shukaily said, ''It would be premature to comment on the pricing of the shares at the present time. The pricing for the first phase would be determined through a book building and auction process and act as the benchmark for the pricing for the public offer. We are also discussing the entire process closely with the Capital Markets Authority.''

Commenting on the offering being restricted to Omani nationals and institutions, Shukaily added, ''It is the present intention of the government that Omani nationals and Omani institutions participate in the current phase of divestment. However, we would like to reiterate that all interested investors, Omani as well as foreign, can always acquire Omantel shares from the Muscat Securities Market.''

In preparation of phase one of the proposed 19 per cent divestment, Shukaily said that the government had already initiated the market consultation process, so as to obtain feedback from some key Omani institutional investors. The proposed transaction is being undertaken in furtherance of the government's policy objectives, including the objectives set out in the Law of Privatisation (Royal Decree 77/2004).

According to Shukaily, ''The principal objectives that the government seeks to achieve from the current transaction are to enhance share ownership of individual and institutional investors in this nationally strategic institution and to enhance active and widespread public participation in the privatisation process initiated by the government.''

The supervisory committee chairman said the latest offering was also aimed at enhancing trading activities, energising the sultanate's markets, and encouraging domestic investment in the national economy.

The supervisory committee was set up within the Ministry of Finance to oversee the orderly and transparent process of the divestment, subsequent to the announcement of the divestment by H E Darwish al Balushi, Minister Responsible for Financial Affairs. Committee chairman Shukaily was also involved in the government's 30 per cent sta

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