02/10/2017 08:08 AST
Liquidation of the Port Services Corporation (PSC), which manages Port Sultan Qaboos in Muscat, will start in January, 2018.
The Ministry of Transport and Communications has decided not to renew its concession agreement with the corporation, after the agreement expires on December 31 this year, according to a disclosure statement posted by the company on the Muscat Securities Market (MSM) website.
Accordingly, liquidators Moore Stephens will start their work to liquidate PSC with effect from January, 2018 as entrusted to them during the company’s extraordinary general meeting (EGM) held on January 17, 2017.
According to an earlier disclosure statement, the EGM also authorised liquidators to sell the entire assets and projects of the company.
In fact, there was an earlier move to liquidate the company in January this year. However, PSC received an extension to manage the port for one more year until December 31, 2017, after a series of negotiations between the port authorities and the ministry officials.
The move to liquidate the company was in light of the fact that the port will not be economically viable and will not generate adequate returns for shareholders. Majority state-owned PSC’s revenue started declining substantially after the government shifted commercial activities of the Muscat port to the Sohar port in August 2014, in a move to convert the former into a full-fledged tourism port.
However, the port continues to receive several cruise vessels, bulk grain carriers, bitumen tankers, vegetable oil carriers, cement carriers, livestock carriers and visiting naval and passenger ships. Last year, the government mandated its tourism investment arm Oman Tourism Development Company (Omran) to drive the transformation of Port Sultan Qaboos into a major maritime-based tourism and leisure hub. The Mina Sultan Qaboos Waterfront Development envisages a mix of maritime, residential, hotel, resort, leisure and retail components.
The company’s net profit (after tax and franchise fee) declined by 40.1 per cent to OMR1.11 million for the first six months of 2017, from OMR1.86 million for the same January-June period of 2016. Total revenue fell 24.8 per cent to OMR3.11 million for the January-June period of 2017, against OMR4.14 million for the same period of 2016. Also, the company’s expenses were down 12.4 per cent to OMR1.99 million, from OMR2.28 million during the six-month period under review.
The Oman government, which has 35.5 per cent stake in PSC, recently transferred its stake to the Oman Investment Fund.
Meanwhile, shares of PSC surged 5.05 per cent to 208 baisas, amid 268,520 shares changing hands on Sunday.
Times of Oman
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