Sembcorp Salalah Power and Water, in which a unit of Singapore's Sembcorp Industries has a 60  per cent stake, plans to raise $138 million by offering 35  per cent of its share capital in an initial public offering (IPO) on August 28.

The $1 billion power plant will offer 33.4 million existing ordinary shares at a price of RO1.59 ($1.42) per share on the Muscat bourse, Sembcorp Salalah said in a statement on Wednesday. This would be worth RO53 million ($137.66 million), the company said.

Sembcorp Utilities, a unit of Sembcorp Industries, has a 60 per cent stake in the Sembcorp Salalah Power and Water Company. Oman Investment Corp owns 35 per cent and Instrata Capital 5 per cent in the joint venture. The statement did not disclose what amount of shares the existing shareholders were each selling in the IPO.

The Salalah Independent Water and Power Plant consists of a gas-fired combined cycle power plant with a gross capacity of 490 megawatts and a seawater desalination plant with a total water production capacity of 69,000 cubic metres per day, according to its website.

After the IPO, the company will have a market value of RO152 millions, the statement said.

Lim Yeow Keong, chief executive officer of Sembcorp Salalah, said, “We are very excited to be soon providing the public with the opportunity to invest in our Company. It’s a unique proposition that provides potential investors with access to an established operator with strong government support and stable revenues, operating within a well-established contractual framework.”

“Our plant is fully operational with minimal operational risk and is run by a highly experienced team. As the largest and most energy-efficient power and water plant in the Dhofar Governorate, our plant will play a major role in meeting the region’s growing and long-term power and water demand, which presents opportunities for future growth,” he added.

The offer runs until Sept 26 and the stock is expected to begin trading on the Muscat bourse on October 10. HSBC Holdings' Middle Eastern arm is the sole global coordinator and bookrunner for the issue. – TradeArabia News Service & Reuters