This appeared a couple of weeks ago, and now the deal seems to be doing though. The share price has dropped from a high of 2.4 rials and is now 1.4.
They are effectively admitting they screwed up the first attempt. Maybe they will listen to some more advice this time around?
Dubai: Oman's state-owned power generator and distributor plans to buy back Dhofar Power Co after the country's first attempt to sell power assets failed to improve service and attract investment, the government-run company said.
Electricity Holding Co, which runs Oman's electricity assets, has agreed on the price for the majority stake in Dhofar Power, Chief Executive Karl Matacz told Bloomberg News at a conference in Dubai yesterday. He didn't disclose the price.
Oman and Dhofar Power previously agreed on a price the government would pay to repurchase the company if its private owners didn't invest enough or improve service. Neither of those requirements has been fulfilled, Matacz said. ...
And here are the shareholders... naughty naughty. They were making a nice 28% on equity. And in debt to the eye balls. So, out they go.
MUSCAT, June 10 (Reuters) - Oman plans to buy the majority stake in Dhofar Power DHP.OM from international and regional private investors, a company statement said on Wednesday.
"Shareholders holding 10,619,378 shares, constituting 53.9 percent of the issued and paid up capital of the company have informed the company that they are in discussions with Electricity Holding Company (EHC), whereby EHC would acquire their entire shareholding in the company," it said.
State-run EHC is negotiating with Malakoff Berhad of Malaysia, Dubai based GCC Energy Fund, local companies Muscat Overseas and Malatan.
Other shareholders include Oman & Emirates Investment Company, local pension funds and private investors.
Dhofar Power made a net profit of 940,000 million rials in the first quarter of 2009, down from 980,000 million rials in the first three months of 2008. (Reporting by Saleh al-Shaibany)
Any 'local' newspapers, Arabic or English, carry this story? Wonder what the real 'skinny' is on the deal. Who makes money, who loses money, and who has egg on their face? Abd
ReplyDeleteIt was bound to happen. Ever since the deal took place, you could see the train heading along, you could see the brick wall, and you could see the tracks joining the two.
ReplyDeleteThe problem was no so much as a matter of revenue return nor of deal-making/breaking, nor are large money matters involved. Rather, the decline in service levels became so atrocious that the EHC has been forced to take action, at a loss.
There have been numerous cases of blackouts, followed by emergency backups and high-officials being roused from bed to sort the issue. The excuse of DPC, as always, is/was "its not financially feasible".
Consider the terrain. In the capital (MEDC, MPC, MEC etc), provide electricity to a hundred homes and you cover the costs of cables, the local districution circuit and transmission losses from Ghubra to the house. 3 kms of cable covers 300 homes. In Dhofar region, you have to spend 10 times the amount to provide electricity to a single village, a single farmhouse etc, which is a recurring loss, as long as the subscriber exists.
The good thing out of this is that the proper ministry officials are not willing to tolerate electricity disruption of any level, even at the cost of being egg-faced.
So this happens.
-FK