|A power generation company that LGI invested in has been listed on the stock exchange in Oman|
|Date : 2019-12-09 | View : 24,961|
A power generation company that LGI invested in has been listed on the stock exchange in Oman
- This is the first case in which an overseas power generation company has been listed on the stock exchange in Oman through investment by a Korean private enterprise
- Revenue of 6.9 million dollars… retrieval of the investment within 2 years from the operation of the power plant
- Operation of a 120MW gas steam power plant, electric power supply to Musandam for 15 years
- Taking the lead in all processes from the business proposal to stock exchange listing… LGI has proven its capability in project businesses
A power generation company that LG International invested in in Oman has been successfully listed on the Oman stock exchange. This was the first time that a power generation company invested in by a Korean private enterprise made an entry on to the Oman stock market.
On Dec 09, LGI stated that it had listed Musandam Power Company (hereinafter MPC) to the Muscat stock exchange, which is a joint corporation that LGI invested in to expand business in the overseas private power generation. MPC is a joint corporation that LGI invested in together with an Oman national investment company OOC (Oman Oil Company) in 2014, with LGI taking a 30% share of it.
Through the IPO last month, MPC secured capital of 23 million dollars by offering 28.2 million worth of stock which are 40% of the total issued amount of stock, while LGI earned a profit of 6.9 million dollars as a result of selling 12% of the stock holdings. Thus, LGI retrieved all of its investment (approx. 11 million dollars) within 2 years from the commercial operation of the power plant, and it has been possible to apply the future dividend income as an additional source of investment.
LGI has been conducting a private electricity generation business in which it has built a 120MW gas-steam power plant and generates electricity in the Musandam Peninsula of Oman through MPC. This power plant is the first private power plant in Musandam, and after construction was completed it commenced with commercial operation in 2017. The electricity generated has been supplied to the Musandam region stably together based on a power purchase agreement that covers a 15 year period concluded with OPWP (Oman Power & Water Procurement Company) which is a national water and power development company in Oman.
Regarding the power generation business in Musandam, Oman, it began in light of LGI proposing its business directly to the Omani government in 2010. The Musandam Peninsula is a highly significant strategic site that due to its geographical advantage, as it is bounded by the Hormuz Strait which is a strategic location of the Middle East crude oil transportation. Considering this fact, LGI predicted that demand for electric power would rise according to the regional economy revival and increase in commercial activities in the future and persuaded the Oman government that the infrastructure for the electricity generation is essential for the Musandam region.
After receiving a positive response from the Oman government, LGI established a joint corporation MPC by cooperating with the local state enterprise OOC for the running of a full-scale business. Also, in addition to concluding a power purchase agreement with the Oman government for securing stable management and profits, LGI took the lead in every process from financial raising to power plant construction and management.
A staff member from LGI explained “LGI has proved its excellence in running a project business by leading all of the processes from the business proposal to the commercial operation of the power plant along with successfully entering the Oman stock market for the first time as a Korean enterprise” and continued “From now on, LGI will strive to create customer value by maintaining a steady and stable cash flow based on the high dividend rate.”
In the meantime, LGI plans to actively develop additional business opportunities mainly in the Asian market including Indonesia and Indochina along with the Middle East with high potential economic growth through its comprehensive business capabilities that cover business planning, sales, financial raising, facility management, and marketing. (The End)
The view of the gas thermal power station in Musandam, Oman