Renaissance to raise $500m in Topaz's London IPO

Oman's Renaissance Services aims to raise about $500 million in a London listing of its Dubai-based oilfield services unit and may also divest part of its stake in a secondary offer, it said on Sunday.

Renaissance's Topaz Energy and Marine stake is expected to be above 51 per cent after the IPO, it said in its 2010 annual report. The exact size of the secondary share sale will be decided closer to the date of Topaz's IPO pricing.

A source close to the deal said on Thursday that the offering is expected to be completed in early April and is being run by Bank of America Merrill Lynch and JP Morgan.

"Renaissance now believes a listing of Topaz on the London Stock Exchange offers the most effective way to optimize future growth opportunities and increase shareholder value," Chairman Samir Fancy said in the report.

Renaissance did not provide a specific timeline for the IPO but said valuations for the share sale will be through a book building process.

It said the precise timing of the IPO will need "careful consideration" due to the political unrest in the Middle East and north Africa. The company will announce a timetable for the IPO, once Topaz advises of its readiness to proceed, it said.

Renaissance's chairman and chief executive will be on the board of the listed firm.

The company said Topaz will have the "attributes" to become a FTSE 250 company after the IPO.

The Gulf's IPO market has suffered in the wake of the global financial crisis with investor appetite for regional offerings severely dampened, forcing some firms to look at London as an alternate destination.

UNLOCKING VALUE

Topaz -- one of the biggest oil services companies in the Middle East -- is the top holding in Renaissance's portfolio of companies. Muscat-listed Renaissance has operations mainly in Oman and calls itself a "multinational holding company" offering services to the oil and gas industry.

"Its a classic case of value unlocking of a subsidiary," said Joice Mathew, head of research at Muscat-based United Securities.

"As the fully owned subsidiary, Topaz is the major revenue generator for Renaissance and the IPO should provide Renaissance global visibility with access to diverse sources of funding, and benchmarking with international peer group."

Renaissance bought Topaz in 2005 through a share swap deal. Last year, Topaz had revenues of $408 million and profits of $70 million, Renaissance said in the report.

In December, Renaissance acquired Abu Dhabi-based Al Wasita Emirates for Services and Catering LLC in a 56 million dirhams ($15.25 million) deal to expand its contract services operations in the UAE.

Renaissance shares were trading 3.2 percent higher on the Muscat bourse at 0845 GMT.

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