(MENAFN- Muscat Daily) Muscat- The merger of Oman Orix Leasing Co into National Finance Co would make National Finance the biggest non-banking finance company in the sultanate with an equity of around RO100mn.
Both National Finance and Oman Orix recently received the Central Bank of Oman's final approval for the merger.
'Post merger National Finance will become the largest firm in the leasing segment having largest market share and will be in a better position to expand operations in the region,' Abdulaziz al Balushi, group chief executive officer of Oman International Development and Investment Co (Ominvest), told Muscat Daily.
Ominvest is one of the biggest shareholders in both Oman Orix and National Finance. It owns around 26 per cent stake in National Finance and 35 per cent stake in Oman Orix.
According to Ominvest officials, National Finance currently has anequity of around RO46mn. The company plans a rights issue of around RO28mn and would also raise another RO18mn through perpetual bonds, taking the total equity to RO92mn.
'These calculations are based keeping in mind that almost all the shareholders of Oman Orix would opt for cash to exit the company.
But if some of Oman Orix shareholders prefer to take National Finance shares then it [equity] could go up also,' Joice Mathew, head of research at United Securities, said.
National Finance's proposed cash offer to the shareholders of Oman Orix is equivalent to a price of 1.2 multiples of the ending book value of Oman Orix as at December 31, 2017.
Shahid Rasool, chief investment officer of Ominvest, said, 'We see the new National Finance (post merger) becoming the largest and most well-managed leasing firm in the region. We want National Finance to expand operations in the GCC and Middle East and North Africa region.'
'We are looking at an Omani leasing company being created with an equity of around RO100mn soon. At this level, National Finance would be even bigger than some of the banks operating in the country,' Rasool added.
Balushi said that they expects all formalities for the merger to be completed by early next year and after that National Finance could focus on expanding operations in the country as well as region.
According to Mathew, with backing of Ominvest and a leasing book valued at around RO400mn the merged entity would have good chances of expanding operation in the region.
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