Sembcorp Salalah Power and Water Company

Sembcorp Salalah IPO Raises RO53mn
2013-09-28
Please refer to the attached file

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Sembcorp Salalah Announces Closing of Initial Public Offering
2013-09-26
OMR 53 million raised in Oman’s largest IPO of 2013

Muscat, 26 September 2013 – Sembcorp Salalah Power & Water Company SAOG (under transformation) (Sembcorp Salalah or the Company), a leading power and water company based in the Dhofar Governorate of Oman, today announced the successful closure of its initial public offering of 35% of the total share capital, or 33,410,019 existing ordinary shares, at a price of OMR 1.590 per share. The issue was opened for subscription on 28 August 2013 and closed on 26 September 2013.

The offering, which raised OMR 53 million, making it the largest in Oman this year as well as one of the largest in the region, was comfortably oversubscribed and attracted strong levels of demand from both retail and institutional investors across the Sultanate, the GCC and Europe. This implies an opening market capitalisation of OMR 152 million. Trading of the company’s shares is set to commence on the Muscat Securities Market on or around 10 October 2013.

HSBC Bank Oman SAOG acted as Issue Manager for the offering. HSBC Bank Middle East Limited acted as Sole Global Coordinator and Bookrunner.

Commenting on the offer close, Mr Lim Yeow Keong, Chief Executive Officer of Sembcorp Salalah, said, “We are delighted by the response we have received from such a wide range of investors in Oman and across the region. The overwhelming support and warm welcome we have received reflects the confidence in Sembcorp Salalah’s stable business model and recognises this unique opportunity to invest in an established operator with strong government support and strong predictability of cash flows.”

“We are thrilled to welcome our new investors to the Sembcorp Salalah shareholder register and we look forward to delivering on our commitment to meet the Dhofar region’s growing and long-term power and water demand.”

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Sembcorp Salalah Share Offer Attractive: United Securities
2013-09-19

One Week Until Sembcorp Salalah IPO Offer Close
2013-09-18
Muscat, 18 September 2013 – Sembcorp Salalah Power & Water Company (“Sembcorp Salalah” or “the Company”), a leading power and water company based in the Dhofar Governorate of Oman, has begun the countdown to the completion of its Initial Public Offering (IPO), which launched on 28 August. The IPO, which has seen strong interest from investors across the Sultanate and the broader Gulf region, closes for subscription on 26 September 2013.

The IPO of 33,410,019 existing ordinary shares represents 35% of the issued share capital of Sembcorp Salalah. The shares will be priced at OMR 1.590 per share, inferring a total offer size of OMR 53 million and a market capitalisation on listing of OMR 152 million. The offering is expected to be the biggest in Oman this year. It is proposed that the shares will be admitted to trading on the Muscat Securities Market on or around 10 October 2013.

HSBC Bank Middle East Limited is the Sole Global Coordinator and Bookrunner. HSBC Bank Oman SAOG is the Issue Manager. Retail investors with an interest in participating in the IPO are encouraged to complete and submit their applications in any of the Collecting Banks which include Bank Muscat, Oman Arab Bank, National Bank of Oman and Bank Dhofar.

Commenting on the IPO, Mr Lim Yeow Keong, Chief Executive Officer of Sembcorp Salalah, said, “With only one week to go until our share offer closes, investors in Oman have a limited period in which to participate in our IPO. We are very excited by the widespread positive investor sentiment and significant interest in the Sembcorp Salalah offer that we have seen over the past three weeks. During this time we have presented investors across Oman and the broader Gulf region with a fantastic opportunity to invest in an established operator with strong predictability of cash flows that will result in stable recurring income, a highly attractive dividend yield and opportunities for growth.”

“As we enter the final week of the subscription period, we are still seeing a strong level of demand for the offer, and I look forward to a successful completion on the 26 September.”

About the IPO

•
The offer period commenced on 28 August 2013 and will end on 26 September 2013 at the end of the working hours of the Collecting Banks. It is proposed that the shares will be admitted to trading on the Muscat Securities Market on or around 10 October 2013.

•
The offer is open to Omani and non-Omani individual investors, juristic persons and institutions through two categories.

•
The minimum subscription for Category I investors is 100 shares and in multiples of 100 shares thereafter. For Category II investors, the minimum subscription is 50,100 shares and in multiples of 100 shares thereafter.

•
The maximum subscription for Category I investors is 50,000 shares. For Category II investors, the maximum subscription is 10% of the size of the share offer, which equates to 3,341,000 shares.

•
Shares are allocated on a proportionate basis and must be 100% pre-funded at the Collecting Banks at the time of subscription.

•
The IPO Prospectus, Articles of Association and Application Forms are available from the following Collecting Banks throughout the offer period: Bank Muscat, Oman Arab Bank, National Bank of Oman and Bank Dhofar. There is also an IPO section on the Sembcorp Salalah website www.ttct.net/sembcorp-demo-1/ipo, which contains further information.

About Sembcorp Salalah:

•
Sembcorp Salalah developed, owns and operates an electricity generation and seawater desalination plant, the Salalah Independent Water and Power Plant, located between Taqah and Mirbat in Oman. The plant is located approximately 50 kilometres from Salalah, the administrative town in the Dhofar Governorate.

•
The plant has been in full commercial operation since 25 May 2012 and has a contracted power capacity of 445 megawatts (MW) and a contracted water capacity of 15 million imperial gallons per day (MiGD). It consists of a gas-fired combined cycle power plant and a reverse osmosis seawater desalination plant.

•
As of the date of this announcement, Sembcorp Salalah supplies approximately 72% of the power dispatch and 100% of the net installed water capacity of the Dhofar Governorate.

•
The Company has invested approximately US$1 billion to develop, finance, build, own and operate the plant. It generates its revenues in accordance with a 15-year power and water purchase agreement (PWPA) with the Oman Power and Water Procurement Company (OPWP), which is indirectly wholly-owned by the Omani government.

•
As the largest and most energy-efficient power and water plant in the Dhofar Governorate, the Salalah Independent Water and Power Plant is expected to play a major role in meeting the growing power and water demand of the region into the foreseeable future and beyond.

•
Sembcorp Salalah is currently 60% owned by Sembcorp Utilities, a wholly-owned subsidiary of Singapore-based Sembcorp Industries, 35% owned by Oman Investment Corporation (OIC) and 5% owned by BDCC Investment Company, which is managed by Instrata.

Business Highlights:
Strong predictability of stable cash flows:

•
Sembcorp Salalah has strong predictability of cash flows that are not affected by the amount of power and water actually required by OPWP as the Company is paid on an availability basis, based on the power and water that is made available.

•
Under the PWPA, Sembcorp Salalah is entitled to receive capacity charges from OPWP for 100% of the available power and water capacity of the plant, which comprise approximately 90% of the total revenue of Sembcorp Salalah. These capacity charges are payable by OPWP regardless of whether the actual output of the plant is dispatched by OPWP.

Well-established contractual framework:

•
Sembcorp Salalah’s project represents one of 12 independent power and/or water production projects to be implemented by the government through OPWP on a “build, own and operate” basis and benefits from a well-established contractual framework.

Strong government support and stable revenues due to the strategic importance of both the industry and project:

•
The power and water sectors are of high strategic importance to the Dhofar Governorate and Oman as a whole. As of July 2013, the plant’s capacity constitutes approximately 72% of the power dispatch and 100% of the net installed water capacity of the Dhofar Governorate.

•
Given the projected growth in electricity and water demand, the plant is expected to remain critical to the continued supply of power and water in the Dhofar Governorate in the long term.

Fully operational project with minimal operating risk:

•
The plant is completed and has been in full commercial operation for over 14 months. In addition, Sembcorp Salalah benefits from minimal operating risk as its operator, Sembcorp Salalah O&M Services Company (Sembcorp Salalah O&M), is a joint venture indirectly owned by the Project Sponsors, Sembcorp Utilities and OIC, creating an alignment of interests which ensures that the plant is operated efficiently. Sembcorp Salalah O&M is managed locally and benefits from the procedures and expertise of Sembcorp Utilities, which is well established and has a demonstrated track record of running similar plants across the continents, with facilities of over 5,900 MW of power capacity and over 1,500 MiGD of water in operation and under development globally.

Excess capacity and outage allowance to ensure an extended plant lifespan:

•
Management believes that the excess of actual capacity over the contracted capacity of the plant will more than compensate for the estimated degradation of the plant over the term of the PWPA.

•
The PWPA also allows Sembcorp Salalah to perform maintenance on the power plant at designated off-peak periods of the year. This contemplated maintenance is likely to extend the lifespan of the plant and delay the degradation of its electricity and desalinated water capacity.

Mitigation of fuel risks:

•
Under the natural gas sales agreement between Sembcorp Salalah and the Ministry of Oil & Gas, the plant has mitigated risks associated with gas quality, gas supply and gas price. In the event that natural gas is not available, and provided that Sembcorp Salalah is not in breach of its obligations regarding the operations of the plant, Sembcorp Salalah is still entitled to receive its incremental costs for the use of diesel from the Ministry of Oil & Gas and capacity charges from OPWP.

Extensive experience of the Project Sponsors:

•
Sembcorp Salalah benefits from the extensive water and energy experience of the Project Sponsors. Sembcorp Utilities is a leading energy, water and on-site logistics group with a strong track record in identifying, securing, financing and executing energy and water projects and has a number of strategic relationships and long-term partnerships with multinational customers. OIC is a private equity investment company with strong experience of investing in the region and a diversified portfolio of investments in the oil and gas, petrochemical, construction and manufacturing sectors in Oman.

•
The project is strategically important to the Project Sponsors, who provide Sembcorp Salalah with technological and management capabilities and expertise that are critical to its operational success.

Experienced and skilled operational personnel:.

•
Sembcorp Salalah has the advantage of well-trained and experienced personnel, who bring extensive management expertise and the knowledge sharing of know-how accumulated through decades of experience. Sembcorp Salalah personnel are also able to attend training and off-site sessions with personnel of the Project Sponsors around the world in order to share and exchange knowledge and best practices.

Opportunities for incremental revenue growth:

•
Sembcorp Salalah has two key opportunities for incremental growth of revenues:

i. The expansion of existing facilities to deliver additional desalinated water capacity, in line with the current government policy to minimise use of groundwater, and

ii. The sale of current excess power capacity.

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Strong Investor Interest in Sembcorp Salalah IPO
2013-09-18

Sembcorp Salalah IPO Roadshow Attracts Investor Interest
2013-09-16, 2013-09-15

Sembcorp IPO Poised to be Oversubscribed
2013-09-15, 2013-09-03

Sembcorp Salalah IPO Roadshow Attracts Investor Interest
2013-09-15
Muscat, 15 September 2013 – Sembcorp Salalah Power & Water Company (“Sembcorp Salalah” or “the Company”), a leading power and water company based in the Dhofar Governorate of Oman, has attracted significant investor interest across the Gulf region during the company’s roadshow meetings with some of the most influential investors in the region.
The IPO roadshow, which started on 28th August, has seen senior management meeting top investors across Oman, Qatar, the UAE and the Kingdom of Saudi Arabia, reflecting the strong level of investor interest in the Company, and in Oman from across the region.
The IPO of 33,410,019 existing ordinary shares, which was launched on 28 August, represents 35% of the issued share capital of Sembcorp Salalah. The shares will be priced at OMR 1.590 per share, inferring a total offer size of OMR 53 million and a market capitalisation on listing of OMR 152 million. The IPO offer period ends on 26 September 2013 and the shares are expected to be admitted to trading on the Muscat Securities Market on or around 10 October 2013. The offering is expected to be the biggest in Oman this year.
Commenting on the favourable reaction by investors, Mr Lim Yeow Keong, Chief Executive Officer of Sembcorp Salalah, said, “The IPO marks a milestone in Sembcorp Salalah’s history and we are very pleased by the positive reception and the significant level of investor interest we have seen so far. We are seeing interest from individual and institutional investors who share our view that the offer represents a good opportunity for investors to benefit from the stable revenues, strong Omani government support, and attractive future dividend yield of Sembcorp Salalah.
“The roadshow is providing a great experience to meet face-to-face with potential investors in Sembcorp Salalah across the region and we look forward to becoming a publicly listed company and broadening our existing shareholder base.”

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MSM Holds Investor Meet on Sembcorp IPO
2013-09-02

Sembcorp Salalah Launches Initial Public Offering
2013-08-29, 2013-08-28

Sembcorp Salalah Launches Initial Public Offering
2013-08-28
An established operator backed by government support, strong predictability of cash flows and experienced Project Sponsors
Subscription is now open for Oman’s biggest IPO so far in 2013

Muscat, 28 August 2013 – Sembcorp Salalah Power & Water Company SAOG (under transformation) (Sembcorp Salalah or the Company), a leading power and water company based in the Dhofar Governorate of Oman, today launched its Initial Public Offering (IPO) of 33,410,019 existing ordinary shares, representing 35% of the issued share capital of Sembcorp Salalah. Shares are priced at OMR 1.590 per ordinary share. The IPO is now open for subscription until 26 September 2013.

The IPO is expected to raise around OMR 53 million, which would make it the biggest share offer in Oman so far in 2013. The existing shareholders, Sembcorp Utilities, Oman Investment Company (OIC) and BDCC Investment Company, are required to undertake this IPO and make 35% of the Company’s shares available to the public as the IPO is a condition under the Project Founders’ Agreement.

Highlights:

•
IPO of 35% of the issued share capital of Sembcorp Salalah

•
Offer runs from 28 August 2013 to 26 September 2013

•
Offer open to individual investors, juristic persons and institutions within Oman, and to non-Omani investors outside of US, Canada, Australia, South Africa, Republic of Ireland and Japan

•
Shares priced at OMR 1.590 per share

•
Offer size of OMR 53 million

•
Market capitalisation on listing of OMR 152 million

•
First day of trading expected to be around 10 October 2013

•
Further information available from the Issue Manager, HSBC Bank Oman SAOG; the following Collecting Banks: Bank Muscat, Oman Arab Bank, National Bank of Oman and Bank Dhofar; as well as at a dedicated IPO website: www.ttct.net/sembcorp-demo-1/ipo

Commenting on the launch, Mr Lim Yeow Keong, Chief Executive Officer of Sembcorp Salalah, said, “We are pleased to offer the public the unique opportunity to invest in Sembcorp Salalah. With an established operation backed by strong government support, our Company allows our shareholders to benefit from a stable business model and strong predictability of cash flows, as well as future growth opportunities. It’s a very exciting time for us as we look forward to welcoming new shareholders into the Company.”
Mr Tang Kin Fei, Group President & CEO of Sembcorp Industries and Chairman of Sembcorp Salalah, said, “We are delighted to launch the next stage in Sembcorp Salalah’s development now that we have successfully delivered this plant, which is expected to play a major role in meeting the region’s growing power and water demand for many years to come. Sembcorp Salalah is a world-class operator that benefits from the proven track record of Sembcorp as an established developer, owner and operator of large-scale power and water projects worldwide, and the regional knowledge and experience of OIC. As a long-term shareholder of the Company, we look forward to welcoming new shareholders on board with us.”
Mr Kalat Al-Bulooshi, CEO of OIC and Deputy Chairman of Sembcorp Salalah, commented, “Sembcorp Salalah makes a valuable contribution to Oman through the provision of power and water to the people of Dhofar. This IPO is a great opportunity for Omanis to own a part of the Company, and to be an integral part of the future of both Sembcorp Salalah and the development of Dhofar.”
About the IPO

•
The offer period will commence on 28 August 2013 and end on 26 September 2013 at the end of the working hours of the Collecting Banks. It is proposed that the shares will be admitted to trading on the Muscat Securities Market on or around 10 October 2013.

•
The offer is open to Omani and non-Omani individual investors, juristic persons and institutions through two categories.

•
The minimum subscription for Category I investors is 100 shares and in multiples of 100 shares thereafter. For Category II investors, the minimum subscription is 50,100 shares and in multiples of 100 shares thereafter.

•
The maximum subscription for Category I investors is 50,000 shares. For Category II investors, the maximum subscription is 10% of the size of the share offer, which equates to 3,341,000 shares.

•
Shares are allocated on a proportionate basis and must be 100% pre-funded at the Collecting Banks at the time of subscription.

•
The IPO Prospectus, Articles of Association and Application Forms will be available from the following Collecting Banks throughout the offer period: Bank Muscat, Oman Arab Bank, National Bank of Oman and Bank Dhofar. There is also an IPO section on the Sembcorp Salalah website www.ttct.net/sembcorp-demo-1/ipo, which contains information about the Company and the IPO as well as downloadable copies of the IPO Prospectus and the summary Offer Pamphlet.

About Sembcorp Salalah:

•
Sembcorp Salalah developed, owns and operates an electricity generation and seawater desalination plant, the Salalah Independent Water and Power Plant, located between Taqah and Mirbat in Oman. The plant is located approximately 50 kilometres from Salalah, the administrative town in the Dhofar Governorate.

•
The plant has been in full commercial operation since 25 May 2012 and has a contracted power capacity of 445 megawatts (MW) and a contracted water capacity of 15 million imperial gallons per day (MiGD). It consists of a gas-fired combined cycle power plant and a reverse osmosis seawater desalination plant.

•
As of the date of this announcement, Sembcorp Salalah supplies approximately 72% of the power dispatch and 100% of the net installed water capacity of the Dhofar Governorate.

•
The Company has invested approximately US$1 billion to develop, finance, build, own and operate the plant. It generates its revenues in accordance with a 15-year power and water purchase agreement (PWPA) with the Oman Power and Water Procurement Company (OPWP), which is indirectly wholly-owned by the Omani government.

•
As the largest and most energy-efficient power and water plant in the Dhofar Governorate, the Salalah Independent Water and Power Plant is expected to play a major role in meeting the growing power and water demand of the region into the foreseeable future and beyond.

•
Sembcorp Salalah is currently 60% owned by Sembcorp Utilities, a wholly-owned subsidiary of Singapore-based Sembcorp Industries, 35% owned by OIC and 5% owned by BDCC Investment Company.

Business Highlights:
Strong predictability of stable cash flows:

•
Sembcorp Salalah has strong predictability of cash flows that are not affected by the amount of power and water actually required by OPWP as the Company is paid on an availability basis, based on the power and water that is made available.

•
Under the PWPA, Sembcorp Salalah is entitled to receive capacity charges from OPWP for 100% of the available power and water capacity of the plant, which comprise approximately 90% of the total revenue of Sembcorp Salalah. These capacity charges are payable by OPWP regardless of whether the actual output of the plant is dispatched by OPWP.

Well-established contractual framework:

•
Sembcorp Salalah’s project represents one of 12 independent power and/or water production projects to be implemented by the government through OPWP on a “build, own and operate” basis and benefits from a well-established contractual framework.

Strong government support and stable revenues due to the strategic importance of both the industry and project:

•
The power and water sectors are of high strategic importance to the Dhofar Governorate and Oman as a whole. As of July 2013, the plant’s capacity constitutes approximately 72% of the power dispatch and 100% of the net installed water capacity of the Dhofar Governorate.

•
Given the projected growth in electricity and water demand, the plant is expected to remain critical to the continued supply of power and water in the Dhofar Governorate in the long term.

Fully operational project with minimal operating risk:

•
The plant is completed and has been in full commercial operation for over 14 months. In addition, Sembcorp Salalah benefits from minimal operating risk as its operator, Sembcorp Salalah O&M Services Company (Sembcorp Salalah O&M), is a joint venture indirectly owned by the Project Sponsors, Sembcorp Utilities and OIC, creating an alignment of interests which ensures that the plant is operated efficiently.

•
Sembcorp Salalah O&M is managed locally and benefits from the procedures and expertise of Sembcorp Utilities, which is well established in the region and has a demonstrated track record of running similar plants, with facilities of over 5,900 MW of power capacity and over 1,500 MiGD of water in operation and under development globally.

Excess capacity and outage allowance to ensure an extended plant lifespan:

•
Management believes that the excess of actual capacity over the contracted capacity of the plant will more than compensate for the estimated degradation of the plant over the term of the PWPA.

•
The PWPA also allows Sembcorp Salalah to perform maintenance on the power plant at designated off-peak periods of the year. This contemplated maintenance is likely to extend the lifespan of the plant and delay the degradation of its electricity and desalinated water capacity.

Mitigation of fuel risks:

•
Under the natural gas sales agreement between Sembcorp Salalah and the Ministry of Oil & Gas, the plant has mitigated risks associated with gas quality, gas supply and gas price. In the event that natural gas is not available, and provided that Sembcorp Salalah is not in breach of its obligations regarding the operations of the plant, Sembcorp Salalah is still entitled to receive its incremental costs for the use of diesel from the Ministry of Oil & Gas and capacity charges from OPWP.

Extensive experience of the Project Sponsors:

•
Sembcorp Salalah benefits from the extensive water and energy experience of the Project Sponsors. Sembcorp Utilities is a leading energy, water and on-site logistics group with a strong track record in identifying, securing, financing and executing energy and water projects and has a number of strategic relationships and long-term partnerships with multinational customers. OIC is a private equity investment company with strong experience of investing in the region and a diversified portfolio of investments in the oil and gas, petrochemical, construction and manufacturing sectors in Oman.

•
The project is strategically important to the Project Sponsors, who provide Sembcorp Salalah with technological and management capabilities and expertise that are critical to its operational success.

Experienced and skilled operational personnel:.

•
Sembcorp Salalah has the advantage of well-trained and experienced personnel, who bring extensive management expertise and the knowledge sharing of know-how accumulated through decades of experience. Sembcorp Salalah personnel are also able to attend training and off-site sessions with personnel of the Project Sponsors around the world in order to share and exchange knowledge and best practices.

Opportunities for incremental revenue growth:

•
Sembcorp Salalah has two key opportunities for incremental growth of revenues:

i. The expansion of existing facilities to deliver additional desalinated water capacity, in line with the current government policy to minimise use of groundwater, and

ii. The sale of current excess power capacity.

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Sembcorp Salalah to Launch its Initial Public Offering on 28 August 2013
2013-08-21
Muscat, 21 August 2013 – Sembcorp Salalah Power & Water Company SAOG (under transformation) (Sembcorp Salalah or the Company), a leading power and water company based in the Dhofar Governorate of Oman, today announces its intention to launch an Initial Public Offering (IPO) of 33,410,019 existing ordinary shares, representing 35% of the issued share capital of Sembcorp Salalah. The shares will be priced at OMR 1.590 per share, inferring a total offer size of OMR 53 million and a market capitalisation on listing of OMR 152 million.
Highlights:

•
IPO of 35% of the issued share capital of Sembcorp Salalah

•
Sembcorp Salalah is undertaking the IPO to comply with the obligations stipulated in the Project Founders’ Agreement

•
HSBC Bank Middle East Limited is the Sole Global Coordinator and Bookrunner. HSBC Bank Oman SAOG is the Issue Manager

•
Offer runs from 28 August 2013 to 26 September 2013

•
Offer open to individual investors, juristic persons and institutions within Oman, and to non-Omani investors outside of US, Canada, Australia, South Africa, Republic of Ireland and Japan

•
Shares priced at OMR 1.590 per share

•
Offer size of OMR 53 million

•
Market capitalisation on listing of OMR 152 million

•
First day of trading expected to be around 10 October 2013

•
Further information available from the Issue Manager, HSBC Bank Oman SAOG; the following Collecting Banks: Bank Muscat, Oman Arab Bank, National Bank of Oman and Bank Dhofar; as well as at a dedicated IPO website: www.ttct.net/sembcorp-demo-1/ipo

Commenting on the IPO, Mr 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.”
About Sembcorp Salalah:

•
Sembcorp Salalah developed, owns and operates an electricity generation and seawater desalination plant, the Salalah Independent Water and Power Plant, located between Taqah and Mirbat in Oman. The plant is located approximately 50 kilometres from Salalah, the administrative town in the Dhofar Governorate.

•
The plant has been in full commercial operation since 25 May 2012 and has a contracted power capacity of 445 megawatts (MW) and a contracted water capacity of 15 million imperial gallons per day (MiGD). It consists of a gas-fired combined cycle power plant and a reverse osmosis seawater desalination plant.

•
As of the date of this announcement, Sembcorp Salalah supplies approximately 72% of the power dispatch and 100% of the net installed water capacity of the Dhofar Governorate.

•
The Company has invested approximately US$1 billion to develop, finance, build, own and operate the plant. It generates its revenues in accordance with a 15-year power and water purchase agreement (PWPA) with the Oman Power and Water Procurement Company (OPWP), which is indirectly wholly-owned by the Omani government.

•
As the largest and most energy-efficient power and water plant in the Dhofar Governorate, the Salalah Independent Water and Power Plant is expected to play a major role in meeting the growing power and water demand of the region into the foreseeable future and beyond.

•
Sembcorp Salalah is currently 60% owned by Sembcorp Utilities, a wholly-owned subsidiary of Singapore-based Sembcorp Industries, 35% owned by OIC and 5% owned by BDCC Investment Company.

Business Highlights:
Strong predictability of stable cash flows:

•
Sembcorp Salalah has strong predictability of cash flows that are not affected by the amount of power and water actually required by OPWP as the Company is paid on an availability basis, based on the power and water that is made available.

•
Under the PWPA, Sembcorp Salalah is entitled to receive capacity charges from OPWP for 100% of the available power and water capacity of the plant, which comprise approximately 90% of the total revenue of Sembcorp Salalah. These capacity charges are payable by OPWP regardless of whether the actual output of the plant is dispatched by OPWP.

Well-established contractual framework:

•
Sembcorp Salalah’s project represents one of 12 independent power and/or water production projects to be implemented by the government through OPWP on a “build, own and operate” basis and benefits from a well-established contractual framework.

Strong government support and stable revenues due to the strategic importance of both the industry and project:

•
The power and water sectors are of high strategic importance to the Dhofar Governorate and Oman as a whole. As of July 2013, the plant’s capacity constitutes approximately 72% of the power dispatch and 100% of the net installed water capacity of the Dhofar Governorate.

•
Given the projected growth in electricity and water demand, the plant is expected to remain critical to the continued supply of power and water in the Dhofar Governorate in the long term.

Fully operational project with minimal operating risk:

•
The plant is completed and has been in full commercial operation for over 14 months. In addition, Sembcorp Salalah benefits from minimal operating risk as its operator, Sembcorp Salalah O&M Services Company (Sembcorp Salalah O&M), is a joint venture indirectly owned by the Project Sponsors, Sembcorp Utilities and OIC, creating an alignment of interests which ensures that the plant is operated efficiently.

•
Sembcorp Salalah O&M is managed locally and benefits from the procedures and expertise of Sembcorp Utilities, which is well established in the region and has a demonstrated track record of running similar plants, with facilities of over 5,900 MW of power capacity and over 1,500 MiGD of water in operation and under development globally.

Excess capacity and outage allowance to ensure an extended plant lifespan:

•
Management believes that the excess of actual capacity over the contracted capacity of the plant will more than compensate for the estimated degradation of the plant over the term of the PWPA.

•
The PWPA also allows Sembcorp Salalah to perform maintenance on the power plant at designated off-peak periods of the year. This contemplated maintenance is likely to extend the lifespan of the plant and delay the degradation of its electricity and desalinated water capacity.

Mitigation of fuel risks:

•
Under the natural gas sales agreement between Sembcorp Salalah and the Ministry of Oil & Gas, the plant has mitigated risks associated with gas quality, gas supply and gas price. In the event that natural gas is not available, and provided that Sembcorp Salalah is not in breach of its obligations regarding the operations of the plant, Sembcorp Salalah is still entitled to receive its incremental costs for the use of diesel from the Ministry of Oil & Gas and capacity charges from OPWP.

Extensive experience of the Project Sponsors:

•
Sembcorp Salalah benefits from the extensive water and energy experience of the Project Sponsors. Sembcorp Utilities is a leading energy, water and on-site logistics group with a strong track record in identifying, securing, financing and executing energy and water projects and has a number of strategic relationships and long-term partnerships with multinational customers. OIC is a private equity investment company with strong experience of investing in the region and a diversified portfolio of investments in the oil and gas, petrochemical, construction and manufacturing sectors in Oman.

•
The project is strategically important to the Project Sponsors, who provide Sembcorp Salalah with technological and management capabilities and expertise that are critical to its operational success.

Experienced and skilled operational personnel:.

•
Sembcorp Salalah has the advantage of well-trained and experienced personnel, who bring extensive management expertise and the knowledge sharing of know-how accumulated through decades of experience. Sembcorp Salalah personnel are also able to attend training and off-site sessions with personnel of the Project Sponsors around the world in order to share and exchange knowledge and best practices

Opportunities for incremental revenue growth:

•
Sembcorp Salalah has two key opportunities for incremental growth of revenues:

i. The expansion of existing facilities to deliver additional desalinated water capacity, in line with the current government policy to minimise use of groundwater, and

ii. The sale of current excess power capacity.

About the IPO

•
The offer period will commence on 28 August 2013 and end on 26 September 2013 at the end of the working hours of the Collecting Banks. It is proposed that the shares will be admitted to trading on the Muscat Securities Market on or around 10 October 2013.

•
The offer is open to Omani and non-Omani individual investors, juristic persons and institutions through two categories.

•
The minimum subscription for Category I investors is 100 shares and in multiples of 100 shares thereafter. For Category II investors, the minimum subscription is 50,100 shares and in multiples of 100 shares thereafter.

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The maximum subscription for Category I investors is 50,000 shares. For Category II investors, the maximum subscription is 10% of the size of the share offer, which equates to 3,341,000 shares.

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Shares are allocated on a proportionate basis and must be 100% pre-funded at the Collecting Banks at the time of subscription.

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The IPO Prospectus, Articles of Association and Application Forms will be available from the following Collecting Banks throughout the offer period: Bank Muscat, Oman Arab Bank, National Bank of Oman and Bank Dhofar. There is also an IPO section on the Sembcorp Salalah website www.ttct.net/sembcorp-demo-1/ipo, which contains further information.

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Sembcorp Salalah Sponsors Road Safety Campaign
2013-07-30

Sembcorp Salalah Launches Internship Programme for Omani Students
2013-06-30
Sembcorp Salalah Power & Water Company, the owners and operators of Salalah Independent Water and Power Plant (Salalah IWPP) today confirmed the launch of its internship programme for local students. Currently seven engineering students from Salalah College of Technology are working at Salalah IWPP as part of the programme which lasts eight weeks.
The students, from the College’s Electrical and Mechanical courses, undertake an intense and in depth programme working full time during the internship.
The first four weeks of the programme focuses on equipping students with a thorough understanding of the plant’s health, safety and environmental practices, as well as introducing them to specific features of the workplace environment. All will be required to show an understanding of the mechanism of operating equipment and apparatus and finally to acquire a broader knowledge of the plant’s processes, inputs and outputs as well as quality issues. The second four weeks includes exposure to the operational parameters of the plant, further interaction with people throughout the business, and getting acquainted with the functionalities of all services and departments of Salalah IWPP.
Lim Yeow Keong, General Manager of Sembcorp Salalah Power & Water Company said, “These young people represent the future of Oman and we are proud to host them at the Salalah IWPP. I along with all of my colleagues have been incredibly impressed with their initiative, work ethic and interest in the programme and I have no doubt that each of our interns will go on to long and successful careers.
At Sembcorp, we believe that we must recognise our role in society, beyond our operating objectives. The Salalah IWPP provides water and power to a region, and I also believe we can contribute even more through vital initiatives such as our internship programme.”
Salim Dhofar Ahmed Al-Rawas – Head of Engineering Dept at Salalah College of Technology added, “Programmes such as the internship at the Salalah IWPP work by building self-confidence and converting academic knowledge to tangible industry skills. We thank Sembcorp Salalah for its support of our students”.
The Salalah IWPP was successfully completed in May 2012 and consists of a gas-fired power plant with a total gross capacity of 490 megawatts (net capacity of 445 megawatts) and a seawater desalination plant with a total water production capacity of 15 million imperial gallons (69,000 cubic metres) per day. It will provide power and water under a 15-year power and water purchase agreement with the Oman Power and Water Procurement Company, which is wholly owned by the Government of Oman. The Salalah IWPP is Sembcorp’s first facility in Oman. Besides the Salalah IWPP, Sembcorp also owns, operates and maintains the Fujairah 1 Independent Water and Power Plant – one of the world’s largest operating hybrid desalination plants – in the UAE since 2006.

Sembcorp Salalah Launches Programme for Omani Students
2013-06-30

Sembcorp Salalah Celebrates World Environment Day with Government Dignitaries
2013-06-10
Sembcorp Salalah Power & Water Company (Sembcorp Salalah) welcomed several local dignitaries in celebration of World Environment Day. Guest of honour was Sheikh Salim bin Faraj Al Huzaily, Director General of Ministry of Environment and Climate Affairs, Salalah. Also in attendance at the event was Mr. Abdullah bin Ahmed Alawi Al Haddad, the Dy. Wali of Mirbat.
While Leonilo Barre Caraos, Plant Manager proposed the welcome address and briefed the audience on the Sembcorp Salalah environmental management initiatives, Ms. Hasina Mohammed Al Amri, stressed the World Environment Day theme 2013, THINK EAT SAVE.
Lim Yeow Keong, General Manager of Salalah Independent Water and Power Plant (Salalah IWPP) said, “Sembcorp Salalah began its presence in Oman with a strong culture and values. In line with our Corporate Policies, the Company has undertaken this project with the deepest respect to the environment in mind. As a Vital Partner, we are fully committed to promote and maintain the highest standards of Health, Safety and Environment in all our activities to minimize our impact and safeguard environment. The celebration of this year’s World Environment Day is one of the many collaborations in the pipeline with the Ministry of Environment and Climate Affairs to promote environmentally friendly practices. We wholeheartedly embrace the theme of this year’s event: ‘Think Eat Save’ and believe that we all can contribute to this vital initiative by thinking before we make our food choices.”
The Salalah IWPP was successfully completed in May 2012 and consists of a gas-fired power plant with a total gross capacity of 490 megawatts (net capacity of 445 megawatts) and a seawater desalination plant with a total water production capacity of 15 million imperial gallons (69,000 cubic metres) per day. It will provide power and water under a 15-year power and water purchase agreement with the Oman Power and Water Procurement Company, which is wholly owned by the Government of Oman.
Sheikh Salim bin Faraj Al Huzaily, Director General of Ministry of Environment and Climate Affairs, Salalah said, “The Ministry of Environment and Climate Affairs has drawn many programs and policies to combat the misuse of natural resources and increase awareness among corporations and local citizens. Steps are being taken to preserve the eco-system through the establishment of environmental norms and best practices whilst at the same time protecting the heritage and traditional culture for conservation and sustainable utilization of natural resources. I am equally delighted to see the continued effort of Sembcorp Salalah not only managing the environmental issues as a responsible Corporate Citizen but also in creating further awareness amongst its employees and the community at large through forums like this. Promoting the concept of World Environment Day will go a long way in creating a sense of environmental responsibility, which is so essential in our everyday life today.”
Commemorating the occasion of World Environment Day, a sapling was planted by DG MECA, Dy. Wali, Mirbat and Lim Yeow Keong, GM Sembcorp Salalah as a symbol of joint effort in conservation of environment.
A vote of thanks was proposed at the closing of the ceremony by Sembcorp IWPP’s Rakesh Kumar Jha, Chemistry and HSE Manager.
The Salalah IWPP is Sembcorp’s first facility in Oman. Besides the Salalah IWPP, Sembcorp also owns, operates and maintains the Fujairah 1 Independent Water and Power Plant – one of the world’s largest operating hybrid desalination plants – in the UAE since 2006.

Celebration of World Environment Day
2013-06-06

Sembcorp Salalah Celebrates the Official Opening of its US$1Billion Salalah Independent Water and Power Plant in Oman
2013-05-19
Sembcorp Salalah Power & Water Company (Sembcorp Salalah) celebrated the official opening of its US$1 billion Salalah Independent Water and Power Plant (Salalah IWPP) in Oman. The ceremony was graced by His Excellencies Sayyid Mohammed bin Sultan bin Hamoud Al Busaidy, Oman’s Minister of State and Governor of Dhofar, and K Shanmugam, Singapore’s Minister for Foreign Affairs and Minister for Law, as the Guests of Honour. They were joined by government officials from Oman and Singapore, senior management representatives from Sembcorp Industries, the Oman Investment Corporation and Instrata Capital.
The Salalah IWPP was successfully completed and commenced full commercial operation in May 2012. The facility consists of a gas-fired power plant with a total gross capacity of 490 megawatts (net capacity of 445 megawatts) and a seawater desalination plant with a total water production capacity of 15 million imperial gallons (69,000 cubic metres) per day. It will provide power and water under a 15-year power and water purchase agreement with the Oman Power and Water Procurement Company, which is wholly owned by the Government of Oman.
Tang Kin Fei, Chairman of Sembcorp Salalah, said, “We at Sembcorp Salalah are very pleased to celebrate this momentous occasion. The successful completion of the Salalah IWPP is a significant milestone for the company.
“As the largest and most energy-efficient power and water plant in Dhofar, the Salalah IWPP will play a major role in meeting the region’s growing power and water demand. We look forward to serving the essential power and water needs of the region for many more years to come.”

Official Opening of Salalah Independent Water and Power Plant
2013-05-19

Sembcorp Salalah Successfully Completes Acceptance Tests for its US$1 Billion Salalah Independent Water and Power Plant
2012-05-28
Sembcorp Salalah Power & Water Company (Sembcorp Salalah) has successfully completed the acceptance tests for its US$1 billion Salalah Independent Water and Power Plant (Salalah IWPP) in Oman. The facility will provide power and water under a 15-year power and water purchase agreement with the Oman Power and Water Procurement Company, which is wholly-owned by the Government of Oman.
The Salalah IWPP consists of a gas-fired power facility with a total gross capacity of 490 megawatts and a seawater desalination facility with a total water production capacity of 15 million imperial gallons (69,000 cubic metres) per day. As the largest and most energy-efficient power and water plant in Dhofar in southern Oman, the Salalah IWPP is expected to play a major role in meeting the growing power and water demand of this region. The first phase of the project was completed in July 2011, within a tight timeline of 19 months from the signing of the power and water purchase agreement. The second phase was subsequently completed in the first quarter of 2012. With the completion of this third and final phase, the plant will commence full commercial operation.
Tang Kin Fei, Chairman of Sembcorp Salalah, said, “The successful completion of the Salalah IWPP will be a significant milestone for Sembcorp Salalah. This facility will enable us to provide essential power and water to meet the growing demand in Dhofar. Together with the Omani government, we will play our part in helping to address the region’s pressing power and water needs.”
Sembcorp Salalah is a joint venture between Sembcorp Industries’ wholly-owned subsidiary Sembcorp Utilities, the Oman Investment Corporation and Bahrain-based Instrata Capital.

First Phase of US$1 Billion Salalah Independent Water and Power Plant is Successfully Completed
2011-07-16
Sembcorp Salalah Power & Water Company (Sembcorp Salalah), a joint venture company between Sembcorp Industries’ fully-owned subsidiary Sembcorp Utilities and the Oman Investment Corporation, has successfully completed the first phase of its US$1.0 billion Salalah Independent Water and Power Plant (IWPP) in Oman. With the completion of the first phase, the facility began dispatching 61 megawatts of power, on schedule, to the Dhofar power grid in Southern Oman.
Targeted to begin full commercial operations in the first half of 2012, the Salalah IWPP will consist of a gas-fired power facility which will have a total net capacity of 445 megawatts and a seawater desalination facility which will employ reverse osmosis technology to produce 15 million imperial gallons (69,000 cubic metres) per day of water.
Mr Tang Kin Fei, Chairman of Sembcorp Salalah, said, “We have met the tight schedule of 19 months from the signing of the Power and Water Purchase Agreement to complete the first phase of the Salalah IWPP on time. This is especially vital as the completion is timely to meet the surge in power demand in Dhofar, which coincides with the summer months every year. Besides playing a significant role in providing power during the demand peak, the facility also enables Dhofar to obtain cheaper power during the summer period. We are confident to complete the entire project ahead of schedule.”

Sembcorp Salalah Signs Contract for US$1 Billion Salalah Independent Water and Power Project in Oman
2009-11-23
Sembcorp Salalah Power & Water Company (Sembcorp Salalah), a joint venture formed between Sembcorp Industries’ fully-owned subsidiary Sembcorp Utilities and the Oman Investment Corporation, has executed a 15-year contract to supply power and water to the Oman Power and Water Procurement Company, which is wholly-owned by the Government of Oman.
The company will be investing approximately US$1 billion to develop, build, own and operate the Salalah Independent Water and Power Plant (Salalah IWPP) in Oman.
Sembcorp Salalah is 60% owned by Sembcorp Utilities and 40% owned by the Oman Investment Corporation, whose shareholders are the Gulf Investment Corporation, the National Investment Funds Company, State General Reserve Fund of the Sultanate of Oman and BankMuscat.
Targeted to begin full commercial operations in the first half of 2012, the Salalah IWPP will consist of a gas-fired power plant which will have a net capacity of 445 megawatts and a seawater desalination plant which will employ reverse osmosis technology to produce 15 million imperial gallons (69,000 cubic metres) per day of water. Set to be the largest and most energy-efficient power and water plant in the Governorate of Dhofar in Southern Oman, the entire electricity and water output from the facility will be sold under the 15-year power and water purchase agreement.
The new facility will increase the power capacity in the Dhofar region from 256 megawatts to 746 megawatts. Given the power and water demand growth in the region, the plant is expected to continue providing power and water beyond this initial term of 15 years. In addition, the facility will be operated and maintained by a joint venture company, Sembcorp Salalah O&M Company, which is 70% owned by Sembcorp Utilities, under a long-term operation and maintenance (O&M) contract for the entire term of the power and water purchase agreement. The remaining 30% of the O&M company is owned by the Oman Investment Corporation. SEPCO III Electric Power Construction Corporation of China is the engineering, procurement and construction contractor under a fixed-price, date-certain turnkey contract and Hydrochem (S), a wholly-owned subsidiary of Hyflux, is the sub-contractor for the seawater desalination plant.
Financial information
The project cost of approximately US$1 billion will be 75% funded through 17-year non-recourse project finance loans, and 25% by shareholder loans. The non-recourse project finance loans will be provided by Standard Chartered Bank (also the Financial Advisor), Bank of China, China Development Bank, BankMuscat, KfW-IPEX Bank and Sumitomo Mitsui Banking Corporation as Mandated Lead Arrangers, and National Bank of Oman and Bank Sohar as Arrangers. The loans will be in US dollars, except for those from BankMuscat, National Bank of Oman and Bank Sohar, which will be in Omani Rials.
