Oman Orix merger with National Finance cleared

20/12/2017 06:02 AST

The Central Bank of Oman (CBO) has given its final approval for the proposed merger of Oman Orix Leasing Company with National Finance Company.

After the acquisition, National Finance will be the biggest non-banking finance company (NBFC) in Oman, with a combined strength of 23 branches, including its head office, across the country.

Sources said that it would be the largest leasing firm in Oman, in terms of paid-up capital, net worth, lending assets, net profit and branch network. Last week, an extraordinary general meeting (EGM) of National Finance Co. had approved the merger with the incorporation of Oman Orix Leasing Co.

According to an earlier report, National Finance has offered a cash buyout to the shareholders of Oman Orix Leasing Company, as part of a merger between the two leading leasing and hire purchase firms in the Sultanate.

National Finance will issue additional shares of the company to the shareholders of Oman Orix at a swap ratio, based on the book value per share of Oman Orix to the book value per share of National Finance’s audited accounts, as on December 31, 2017. For those shareholders opting for cash, the share price will be equal to 1.2 times of the book value of Oman Orix, as on December 31, 2017.

National Finance will raise its paid up capital to OMR49.69 million from OMR27.93 million by issuing 217.6 million shares on rights basis at a price of 127 baisas per share. The rights offer is subject to regulatory approval. National Finance will also increase its authorised share capital to OMR75 million from OMR30 million. Further, National Finance plans to issue perpetual bonds for OMR18.20 million through private placement, subject to regulatory approval. The EGM has authorised the board of directors to undertake all the necessary steps to conclude the transaction, including the approval of the interest rate, the number of investors, amount to be allocated to each investor and the appointment of relevant advisors for the transaction.

National Finance Company and Oman Orix Leasing Company signed a framework agreement for the proposed merger between the two leasing firms last month.

However, to complete the merger procedure, both companies have to sign a final merger agreement and announce the audited accounts, which are expected sometime in February.

The shares of National Finance were transferred to the under monitoring market from the parallel market by the Muscat Securities Market on December 18. Also, the shares of Oman Orix shares were transferred to the under monitoring market and its trading suspended on December 17.

Times of Oman