Consolidated Energy Limited (CEL), a global methanol production giant, has successfully acquired a controlling 60% stake in Oman Methanol Company LLC (OMC), a significant player in the methanol industry with a major plant in Sohar Port. This strategic move positions CEL, a subsidiary of Proman AG and Helm AG, as a dominant force in the methanol sector, expanding its influence beyond its current operations in Trinidad and Tobago, the United States, and the Sultanate of Oman.

As of December 29, 2023, CEL executed the acquisition, augmenting its stake in OMC from 26.1% to a commanding 60.0% ownership, marking a substantial investment of $347 million. OMC, established in 2004 through a joint venture between Methanol Holdings International Limited (MHIL), an affiliate of Proman, and Oman Methanol Holding Company LLC (a division of Omzest Group), operates a methanol plant that commenced operations in December 2007. The facility boasts a daily production capacity of around 3,000 metric tons of methanol.

CEL's parent companies, Proman AG and Helm AG, have positioned the company as a key player with methanol production facilities across multiple continents, reaching distribution networks that span major markets in the Americas, Europe, and Asia. This latest strategic move to consolidate a majority stake in OMC enhances CEL's global footprint and strengthens its role as a leading methanol producer on the world stage.

Helm AG, known for its global chemical distribution prowess, plays a pivotal role in marketing OMC's methanol output to industrial consumers worldwide. Methanol, recognized as a versatile chemical intermediate, finds application in various everyday products. Its usage extends to the production of fuel additives, solvents, polymers, and specialized compounds. As a low-emission fuel additive, methanol plays a key role in gasoline and LPG blending and holds significance in biodiesel production.

The recent move by CEL aligns with its overarching strategy to solidify its position in the global methanol market. The acquisition of a majority stake in OMC is expected to synergize with CEL's existing operations, enhancing production capabilities and market reach. The strategic expansion into Oman further diversifies CEL's geographic presence and contributes to its overarching goal of meeting the growing demand for methanol globally.

In a noteworthy development earlier this week, Fitch Ratings assigned a 'BB-' first-time Long-Term Issuer Default Rating (IDR) to Consolidated Energy Ltd (CEL). The international ratings agency also bestowed a 'BB+'/'RR2' rating on the company's secured debt and a 'BB-'/'RR4' rating on its unsecured debt. Fitch's assessment recognizes CEL's status as a preeminent global methanol supplier, boasting a production capacity exceeding 7 million metric tons (MT).

To fund the $347 million acquisition and support its strategic initiatives, CEL announced the issuance of $745 million in new term loan debt, alongside other unsecured debt. This financial maneuver will also be utilized to refinance existing secured debt amounting to $658 million and cover a deferred M&A consideration of $166 million arising from Proman's acquisition of CEL in 2020.