Divestments garner over $2bln in revenues over 2022-23: Oman Investment Authority

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MUSCAT - Having generated over RO 1 billion over the 2022-2023 timeframe through divestments in its subsidiaries and affiliated companies, Oman Investment Authority (OIA) has pledged to press ahead with its divestment strategy over the next five years.

In a post, the integrated sovereign wealth fund said the divestment plan over the 2024 – 2028 timeframe envisions Initial Public Offerings (IPOs) in businesses linked to the energy, services and logistics sectors. At the same time, strategic investments will be invited to make private placements in businesses related to agriculture, aquaculture and mining.

The new divestment strategy comes on the heels of Monday’s announcement by OIA-owned OQ Group that its exploration and production unit OQEP will divest 25 per cent of its stake via an IPO and eventual listing on the Muscat Stock Exchange (MSX). The IPO is anticipated to raise an estimated $2 billion, say experts.

“The divestment plan of OIA continues to achieve its national targets,” the Authority noted in its post on Monday.

“In 2022 and 2023, it successfully generated revenues exceeding RO 1 billion after divesting from 12 investments, while continuing to establish an institutional approach by updating the plan and creating steering committees to ensure its effective management.”

OIA’s divestment plan, launched in 2022, has the following national strategic goals: Attracting foreign investment, Deepening and expanding the Muscat Stock Exchange, Restructuring capital for greater efficiency, Repaying debts and deleveraging, Localising new technologies, Fostering deeper partnerships with the private sector and international investors, and Reinvesting revenues from divested mature assets. These efforts are not only reshaping Oman’s economy but also positioning the nation as a regional leader in financial innovation and strategic growth.

The 12 divestments undertaken thus far include high-profile IPOs involving The Pearl REIF, Abraj Energy Services, and OQ Gas Networks. A further nine private placements were undertaken as well. Private placements with strategic investors, coupled with reinvesting revenue from divested mature assets, are vital components of this strategy.

A distinctive feature of Oman’s Divestment Plan is its institutionalized divestment process. Steering committees have been set up in companies targeted for divestment to ensure adherence to timelines and strategies for divestment. OIA is also updating its divestment plan to cover the 2025 – 2029 period.