Nama Group, the holding company grouping all of Oman's state-owned electricity transmission, distribution and related power sector entities, says it plans to conclude a study on the proposed privatisation of its subsidiary, Muscat Electricity Distribution Company (MEDC), by the end of this year.
Phase 1 of the study to assess the readiness of MEDC for privatization has been completed, with the Group now focused on undertaking the second phase of the study, Omar al Wahaibi, CEO -- Nama Group, said.
"We will send our conclusions and recommendations to the government, hopefully by the second half of this year, and then we will wait for government instructions on whether they have accepted our recommendations or not. Depending upon the government's response, we will then start the execution stage with regard to privatisation," said Al Wahaibi.
MEDC, the largest of Nama Group's distribution and supply companies based on the size of its customer base, is the first of its many subsidiaries identified for gradual privatisation as part of the government's long-term strategy to open up the power sector to private investment.
In February 2015, the wholly government-owned holding company appointed a consortium led by Canada based CPCS Transcom International Limited to conduct the privatization study of MEDC . A key objective of the strategic study is to assess the feasibility of divesting part of MEDC 's equity via an Initial Public Offering (IPO) on the Muscat Securities Market (MSM).
The CPCS consortium has been tasked with carrying out initial technical, financial and legal reviews of Muscat Electricity Distribution Company SAOC that are necessary for a successful completion of the privatization strategy.
Meanwhile, senior officials of Nama Group have discounted the possibility of any significant impact to the group's financing strategy stemming from international ratings agency Moody's latest ratings actions on the Group and its subsidiaries.
Interest from local, regional and international lenders in the Group's fund-raising efforts continues to be healthy, the Group's chief financial officer said, referring to the strong revenue growth posted by subsidiaries last year.
According to officials, Phase one of the Group's Lamar Capital Delivery Project implementation has been successfully completed, having raised a $1 billion bond from international markets for subsidiary Oman Electricity Transmission Company's (OETC) long terms capital expenditure.
The Group has also arranged RO 537 million in long-term loans for MEDC and Mazoon Electricity Company in 2015, and Majan Electricity Company this year. It is currently in the market for $250 million in finance for Dhofar Power Company.