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16 December 2019
HALAL ECONOMY

China’s state grid acquires 49 per cent stake in Oman’s Nama Holding

In October 2018, the first phase of the privatisation programme was launched when the Sultanate announced the sale of up to 49 per cent of the shares held in Oman Electricity Transmission Company (OETC) and up to 70 per cent of the shares held in the distribution and supply companies.

Bloomberg/Christopher Pike

by Kudakwashe Muzoriwa

State Grid Corporation of China (SGCC) has acquired a 49 per cent stake in Oman Electricity Transmission Company also known as Nama Holding in the first major privatisation by the Middle East’s largest non-OPEC oil producer.

The deal is one of five privatisations that Nama Holding is planning as Oman seeks to raise cash from asset sales to bolster its coffers, which have been depleted over the past few years by a slump in oil prices.

Beijing-based SGCC will acquire the stake in a deal that values OETC at about $1 billion and Nama Holding will retain a controlling stake in Oman electricity company after the transaction. The privatisation attracted interest from large international investors and is the largest in size in the country’s electricity sector.

A potential deal will be a landmark for the Gulf Arab monarchy as it embarks on asset sales of government-owned entities to plug one of the largest budget deficits among oil exporters. The deal is also a sign of China’s rising interest in the Middle East amid plans by President Xi Jinping to increase the nation’s political clout and revive ancient trading routes under his

State Grid Corporation of China (SGCC) has acquired a 49 per cent stake in Oman Electricity Transmission Company also known as Nama Holding in the first major privatisation by the Middle East’s largest non-OPEC oil producer.

The deal is one of five privatisations that Nama Holding is planning as Oman seeks to raise cash from asset sales to bolster its coffers, which have been depleted over the past few years by a slump in oil prices.

Beijing-based SGCC will acquire the stake in a deal that values OETC at about $1 billion and Nama Holding will retain a controlling stake in Oman electricity company after the transaction. The privatisation attracted interest from large international investors and is the largest in size in the country’s electricity sector.

A potential deal will be a landmark for the Gulf Arab monarchy as it embarks on asset sales of government-owned entities to plug one of the largest budget deficits among oil exporters. The deal is also a sign of China’s rising interest in the Middle East amid plans by President Xi Jinping to increase the nation’s political clout and revive ancient trading routes under his ‘One Belt, One Road’ initiative.

Oman Electricity owns and operates the nation’s main transmission network. The company, which is a subsidiary of Nama Holding, posted a profit of OMR 23 million ($60 million) in H1 2019 compared with OMR 17 million for the same period last year.

Oman has one of the biggest budget shortfalls of all the sovereigns tracked by Fitch Ratings. The Sultanate finances have been hurt by lower oil prices, pushing the government to consider alternative sources of funding. It has been raising money from international debt markets to plug the deficit.

Oman Electricity owns and operates the nation’s main transmission network. The company, which is a subsidiary of Nama Holding, posted a profit of OMR 23 million ($60 million) in H1 2019 compared with OMR 17 million for the same period last year.

Oman has one of the biggest budget shortfalls of all the sovereigns tracked by Fitch Ratings. The Sultanate finances have been hurt by lower oil prices, pushing the government to consider alternative sources of funding. It has been raising money from international debt markets to plug the deficit.


RELATED STORIES: Fitch Ratings Nama Holding State Grid Corporation of China Oman Electricity Transmission Company privatisation

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