Orascom Construction To Tell Authorities It Owes No Tax On Sale

Orascom Construction Industries – OCI (OCIC.CA), Egypt’s largest publicly traded company, will tell the authorities next week that it has no unpaid tax, said investor relations manager Omar Darwazah.

OCI was indirectly accused by President Mohamed Morsi in an Oct. 6 speech of avoiding tax on the 8.8 billion-euros ($11.5 billion) sale of its cement unit to Lafarge SA (LG) in 2007, two months after listing it on the Cairo bourse. The company said the profit is exempted from tax under Egyptian law. OCI is also bidding for power and steel contracts in Iraq and Egypt.

“This is the first year after the 2003 war, in which you’re really seeing significant infrastructure spending in Iraq,” Darwazeh said in a telephone interview. “Iraq and Saudi Arabia are key markets for us.”

The company expects to complete the separation of its construction and fertilizer units in November, Darwazah said.

OCI’s share price rose 2.1% to 271.1 pounds at the market close in Cairo, extending a 35% rise for the year. Egypt’s EGX30 Benchmark Index has increase 61% in the same period.

Bloomberg