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MENAFN - Times of Oman - 14/09/2003

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MUSCAT — As part of its corporate strategy through diversification and realignment of investments, Onic Holding, one of the largest investment majors in the Middle East, is exploring fresh investment opportunities through acquisitions in Oman and the Gulf.

"We are embarking on a diversification and expansion programme with a strong and maintained focus on our core areas of operations such as insurance and other financial services," Akbar Ali Habib, chief executive of Onic Holding, told Times Business yesterday.

The proposed acquisitions, strategic alliances and investments the company is eyeing include not only insurance and other financial services but also other areas where it foresees attainable results.

"Of course, our focus is the Gulf market and are exploring acquisitions and strategic alliances in insurance and other financial services.

"We will continue our endeavours to enhance and preserve shareholders' equity and put every effort to safeguard the company's assets and expand the investments locally and regionally," Akbar Ali added.

The net asset value per share as at the end of June 2003 stood at RO2.306, Earnings Per Share at RO0.441 and shareholders' equity per share at RO2.290. Currently, the company's share has been quoting around RO3.300 on the MSM.

An eight-member steering committee has been managing the affairs of Onic Holding competently since September 4, 2001. The steering committee appointed by the Capital Market Authority (CMA) has reviewing the company's operations, and since then, its initiatives including diversification, divestment and asset realignment plans have brought in good results.

Salim Hassan Macki is the chairman of the steering committee and Ahmed Salim Al Wahaibi is vice-chairman. Other members are: Abdullah Al Salmi (chairman of MSM and executive vice-president of CMA); Akbar Ali Habib (also the chief executive); Ali Mohammed Jumah; Rajab Al Katheri; Abdul Aziz Al Balushi (NBO); and Ganeshan Sridhar (BankMuscat).

Amount due from one of the company's shareholders — Al Yousef Group — has already been settled. Onic Holding had withdrawn the RO43.3 million suit filed against the group following the company's shareholders' endorsement of the RO14.07 million settlement offer made by the group.

With the continuous pressure on liquidity, the company had been struggling to meet its substantial banking and other obligations. One of the local banks, which was one of the major creditors of Onic Holding, had filed a case against the company claiming over RO5.5 million along with 14 per cent interest, representing the overdraft balance payable to the bank. The company had paid RO6.4 million to the bank in settlement of its overdraft balance payable to the latter.

Again, the bank filed a case against the company for about RO13,000, and the latter filed a counterclaim against the former for over RO3.3 million. The court passed a preliminary judgment dismissing claims of both the parties. The company said in its latest director's report that it had filed an appeal with the Appeal Court, which was expected to come up for hearing in October.

Times have certainly changed for the once one-stop-shop for financial services — insurance, investment and banking. On a reduced capital of RO10 million, the company had posted over 2.5 times growth in its net profit at RO3.8 million for the year ended March 31, 2003 compared with RO1.5 million recorded in the preceding year.

The company had posted a net profit of RO4.4 million for the first quarter of the current year ended June 30, 2003. The key reason for upsurge in profitability can be attributed to substantial increase in the gross operating income from its subsidiaries and also investment holdings to the tune of about RO3 million.

In fact, Onic Holding's profit had soared from RO0.5 million in 1979 to a whopping of RO15.85 million in 1997. It had recorded a profit of RO7.73 million for the year 1998 and paid a dividend of 12 per cent for the year. The profit for the third quarter of 1999 stood at RO2.85 million. However, the investor confidence took a severe beating in the last quarter of the same year, when it posted a huge loss of RO35 million, grinding down nearly 40 per cent of the shareholders' equity in a year.

Onic Holding, which is gradually regaining its lost glory as the one-stop-shop for financial services had been going through a bad patch with over RO31 million debts for about two years. Its balance sheet as of June-end 2003 shows bank loans and overdrafts as zero. The company with assets of about RO50 million has significant investments in listed and unlisted companies.

The company having about RO23 million shareholders' funds, has two major insurance subsidiaries — National Life Insurance Company and Al Ahlia Insurance Company — holding about 98 per cent and about 100 per cent stakes, respectively. During the first quarter, the company has released RO2.58 million from the provision that it had provided against impairment in its associate company — Oman Investment Finance Company (OIFC).

Other associates of Onic Holding include Oman Orix Leasing (25.3 per cent), Al Anwar Industrial Trading (20 per cent), Al Anwar Ceramic (10 per cent), etc.

Lately, to comprehensively re-align the asset-base and settle liabilities, it had pulled out of Saudi Continental Insurance Company (Sconic) by divesting its 75 per cent stake in the latter to Aggad Group. The deal was a transfer of Onic Holding's 75 per cent shareholding in Sconic to Aggad Group to settle its 2.2 million liabilities to the Saudi insurance firm. In line with the agreement, Onic Holding has settled its 2.2 million liability to Sconic by paying 1.1 million, and transferring its 75 per cent stake in Sconic to Aggad Group. The company had also sold 66 per cent holdings in Gulf ARIG and the holdings have been reduced to 34 per cent.


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