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Sembcorp Salalah to launch IPO this month

Offer size of OMR 53 million values the IWPP at OMR 152 million.

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A view of a Sembcorp project in Fujairah.
A view of a Sembcorp project in Fujairah.

Sembcorp Salalah Power & Water Company, a power and water company based in the Dhofar Governorate of Oman, has announced its intention to launch an Initial Public Offering (IPO) of 33,410,019 existing ordinary shares, representing 35% of the issued share capital of Sembcorp Salalah.

The shares will be priced at OMR 1.590 per share, inferring a total offer size of OMR 53 million and a market capitalisation on listing of OMR 152 million.

Sembcorp Salalah developed, owns and operates an electricity generation and seawater desalination plant, the Salalah Independent Water and Power Plant, located between Taqah and Mirbat in Oman. The plant is located approximately 50 kilometres from Salalah, the administrative town in the Dhofar Governorate.

The plant has been in full commercial operation since 25 May 2012 and has a contracted power capacity of 445 megawatts (MW) and a contracted water capacity of 15 million imperial gallons per day (MiGD). It consists of a gas-fired combined cycle power plant and a reverse osmosis seawater desalination plant.

Salalah supplies approximately 72% of the power dispatch and 100% of the net installed water capacity of the Dhofar Governorate.

The Company has invested approximately US$1 billion to develop, finance, build, own and operate the plant. It generates its revenues in accordance with a 15-year power and water purchase agreement (PWPA) with the Oman Power and Water Procurement Company (OPWP), which is indirectly wholly-owned by the Omani government.

Sembcorp Salalah is currently 60% owned by Sembcorp Utilities, a wholly-owned subsidiary of Singapore-based Sembcorp Industries, 35% owned by OIC and 5% owned by BDCC Investment Company.

Lim Yeow Keong, Chief Executive Officer of Sembcorp Salalah, said, “We are very excited to be soon providing the public with the opportunity to invest in our Company. It’s a unique proposition that provides potential investors with access to an established operator with strong government support and stable revenues, operating within a well-established contractual framework.

"Our plant is fully operational with minimal operational risk and is run by a highly experienced team. As the largest and most energy-efficient power and water plant in the Dhofar Governorate, our plant will play a major role in meeting the region’s growing and long-term power and water demand, which presents opportunities for future growth.”

IPO facts and figures:
- IPO of 35% of the issued share capital of Sembcorp Salalah
- Sembcorp Salalah is undertaking the IPO to comply with the obligations stipulated in the Project Founders’ Agreement
- HSBC Bank Middle East Limited is the Sole Global Coordinator and Bookrunner. HSBC Bank Oman SAOG is the Issue Manager
- Offer runs from 28 August 2013 to 26 September 2013
- Offer open to individual investors, juristic persons and institutions within Oman, and to non-Omani investors outside of US, Canada, Australia, South Africa, Republic of Ireland and Japan
- Shares priced at OMR 1.590 per share
- Offer size of OMR 53 million
- Market capitalisation on listing of OMR 152 million
- First day of trading expected to be around 10 October 2013

Further information is available at a dedicated IPO website: www.sembcorpsalalah.com.om/ipo

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