OQ raises $750mn in debut bond issuance
In efforts to diversify its funding sources, Oman’s integrated energy company OQ last week announced its inaugural bond issuance in the international debt capital markets.
OQ has successfully executed its seven-year initial bond issuance of US$750mn in the international debt capital markets, according to a press statement issued by the company.
This [bond issuance] is a further step towards enhancing OQ’s presence in the international markets and amongst its investors, the company said.
Talal al Awfi, OQ’s group chief executive officer, said, “The execution of the bond is a great success for both OQ and Oman. It comes in line with the best global investment practices and aims to meet OQ’s funding requirements. It also emphasisesOQ’s presence as a global energy player and the trust we have amongst the global investors.”
OQ’s chief financial officer Nazar al Lawati, said, “In line with our financial strategy for 2021, we are very pleased to announce that OQ has successfully executed its inaugural bond issuance in the international debt capital markets, with strong participation from investors and financial institutions from around the world.”
“Despite overwhelming demand, OQ decided to limit its initial issuance under the newly-established bond programme to US$750mn in a seven-year bond for general corporate purposes,” Lawati added.
While diversifying its funding source and improving its debt profile, OQ is also focused on executing its divestment strategy which will seek to privatise certain assets to reduce the organisation’s current leverage levels, according to Awfi. “I would like to sincerely thank all those who participated in achieving this momentous milestone for the company,” he added.
According to a Bloomberg News report published on Thursday, OQ plans to reduce its reliance on Oman’s strained finances by selling assets, issuing bonds and refinancing debt to fund a US$7.9bn spending plan over the next five years. OQ will shift focus from reinvesting in the company to achieving funding self-sufficiency, according to a bond prospectus seen by Bloomberg News.
The group, as per its press statement, believes that OQ’s inaugural bond will further enhance Oman’s presence in the international market as one of the main global players in the energy sector through providing investment opportunities for global investors, help to diversify its funding sources and will contribute to the Omani economy.
OQ is a global integrated energy company with roots in Oman. With operations across 17 countries, the group covers the entire value chain from hydrocarbons exploration and production to marketing and distribution of end-user products. OQ’s fuels and chemicals are sold in over 60 countries worldwide, making it a pioneer in the energy sector.
OQ recently signed a share purchase agreement with India’s state-run Bharat Petroleum Corporation Limited (BPCL) to sell its entire 36.62 per cent stake in India-based Bharat Oman Refineries Limited (BORL) for R24bn (approximately RO125mn). BORL owns and operates Bina Refinery, located at Bina in the state of Madhya Pradesh in India.