Shares in Oman Telecommunications Co OTL.OM (Omantel) plunged to a 10-week low on Tuesday after the government rekindled plans to reduce its stake in the former monopoly.
Omantel was down 5.6 percent at 1.51 rials at 0624 GMT, its lowest level since July 11 and nearly wiping out its 2013 gains as investors gave the thumbs-down to a state move to offload a 19 percent stake in the operator via a public subscription that will be open to individual and institutional investors.
In 2007, the government said it would offload a 25 percent stake in Omantel, prequalifying eight operators from Europe, Asia and the Middle East for the sale, but it then postponed the sale in December 2008, citing the global financial crisis.
Omantel announced the planned secondary share sale through a statement on the Muscat bourse on Tuesday and said the government would appoint a consultant for the proposed sale.
The government holds a 70 percent stake in Omantel, so the sale would leave the state with a majority 51 percent holding.
Omantel’s market capitalisation was $3.13 billion as of September 16, according to Reuters data, making a 19 percent stake worth about $595 million.
The new sale plan comes as Omantel fights back against domestic rival Nawras – majority-owned by Qatar’s Ooredoo ORDS.QA.
Omantel’s share of the country’s mobile subscribers was 58 percent at 2012-end, up from 53 percent in 2009 according to its annual reports.
The company has a near-monopoly on fixed line services, claiming a 96 percent market share last year.
That dominant position has enabled Omantel to improve its financial performance and it made an annual profit of 116.2 million rials ($301.82 million) in 2012, according to Reuters data. This was up 4 percent from 2011, when the company’s profit slumped to a six-year low.
Unlike other Gulf former monopoly operators, Omantel has done little to expand abroad. Its only active foreign unit is Pakistan’s Worldcall, in which Omantel owns a 57 percent stake. ($1 = 0.3850 Omani rials)-Reuters
