Egyptian Billionaire Nassef Sawiris plans to return a part of his business to Egypt amid growing demand for construction in the Middle East, 13 months after he moved Orascom Construction Industries to Holland.
Amsterdam-based OCI NV (OCI), of which Sawiris is chief executive officer and the biggest shareholder, approved separating its fertilizers and construction businesses and will seek to sell shares in the latter, the company said in an e-mailed statement today. The initial public offering in Egypt will take place in either the fourth quarter of 2014 or the first quarter of next year, Sawiris said in a conference call with investors and analysts.
“We will have a presence in Egypt, that’s our intention,” Sawiris said. The “nationality” of the company that will be listed and size of the share sale are still being decided, he said. Sawiris and his family will participate in the capital increase if the IPO raises new money, he said.
Sawiris relocated Orascom through a buyout by OCI, an entity he helped set up amid a tax dispute with the Islamist-led former Egyptian government. Having settled the case by agreeing to pay 7 billion Egyptian pounds ($979 million) in April 2013, Sawiris appealed after the military seized power less than three months later.
“We’re making our case that there was no tax claim justification and that this was politically motivated under the Muslim Brotherhood,” Sawiris said. The next hearing in the case is Sept. 16 and a final decision is expected shortly after, he said.
Declining Profit
OCI shares declined 0.8 percent to 27.16 euros as of 2:48 p.m. in Amsterdam. That values the company at 5.59 billion euros ($7.37 billion), and takes its retreat from a record high in March to 27 percent.
OCI’s first half profit fell to $39.5 million from $55.9 million a year earlier as finance income dropped and a natural gas shortage in Egypt cut operations at its fertilizer plants, the company said today. Its construction backlog grew by $1.1 billion in the three months ended in June, to $5 billion.
Splitting OCI’s businesses will create value for shareholders and enable the two units to focus on their separate growth strategies, the company said. Construction project awards in the company’s main markets of Egypt, Saudi Arabia and the United Arab Emirates are expected to grow, Sawiris said.
Source: Bloomberg
