EGX 30 Ends Below 5200 Pts As Regulator OKs OCI’s Amsterdam Listing
The Egyptian Exchange (EGX) has ended Tuesday’s session posting gains of EGP 561 billion coinciding with the announcement made by the Dutch Unit of Orascom Construction Industries S.A.E about reaching a final agreement between OCI and Egyptian Tax Authority to end a 10-month tax disputes and about receiving regulatory approval on OCI N.V.’s transaction.
The capital market has reached to EGP 355.533 billion during Tuesday’s closing session.
The EGX indices ended Tuesday in red notes driven by the regulatory approval on OCI N.V.’s offer to transfer the shares of Orascom Construction Industries (OCIC.CA), Egypt’s biggest publicly traded company, to NYSE Euronext Amsterdam.
Egypt’s benchmark index EGX30 fell by 0.05% to close at 5196.48 p; while the EGX20, it also inched down by 0.28% to end at 5986.24 p.
Meanwhile, the mid- and small-cap index, the EGX70 dropped by 0.20% to conclude at 448.78 p. Price index EGX100 dipped by 0.28% to finish 745.68 p.
During Tuesday’s closing, the trading volume hit 49.940 million securities, higher than Monday’s 38.177 million securities, representing an increase of 11.763 thousand securities. For the traded value, it reached EGP 211.572 million, exchanged through 12.413 thousand transactions.
This was after trading in 162 listed securities; 76 declined, 47 advanced; while 39 keeping their previous levels.
Arabs and the non-Arab foreigners were net sellers seizing 6.66% and 35.81% respectively, of the total markets, with a net equity of EGP 2.596 million and EGP 18.956 million excluding the deals.
Meanwhile, Egyptians were net buyers seizing 57.53% of the total markets, with a net equity of EGP 21.552 million, excluding the deals.
Orascom Construction Agrees To Pay EGP 7.1 Bln To Egypt Tax:
OCI N.V.’s subsidiary, Orascom Construction Industries (OCIC.CA), announced on Tuesday that it will pay the Egyptian Tax Authority (ETA) ten installments during 2013- 2017 totaling EGP 7.1 billion less EGP 182 million in existing tax credits to end a dispute regarding tax claims for the years 2007 to 2010.
During that period, OCI SAE divested its cement business through the sale of a listed subsidiary, Orascom Building Materials Holding (OBMH). The agreed amount is based on the originally disclosed tax claim by the ETA of EGP 4.7 billion including accrued interest and delay fees.
As pursuant to the settlement agreement, the payments shall start with an initial payment of EGP 2.5 billion in Q2 2013, EGP 900 million in December 2013, six equal installments of EGP 450 million and two final installments of EGP 500 million in 2017 totaling the agreed to EGP 7.1 billion.
OCI N.V. will loan its subsidiary OCI S.A.E., the Egypt listed company, the necessary funds required for the tax settlement through intercompany loans to be coordinated and channeled into the country through the Central Bank of Egypt.
The settlement amount was reached following months of challenging negotiations. In conjunction with this agreement, the ETA has determined that there was no tax evasion by the Company and is exonerating management and the Company from any wrongdoing related to the transaction.
Amsterdam Listing:
With the settlement of the tax claim, OCI N.V. expects to proceed with its filing for the Mandatory Tender Offer (MTO) for the ordinary shares of OCI SAE with details to be announced in due course.
OCI N.V. Chairman Mike Bennett commented, “Having concluded this matter, OCI and its management look forward to a positive relationship with the Egyptian Government where our investments in Egypt can prosper and the Company is able to channel its resources towards growth and potential new investments.”
OCI N.V. Chief Executive Officer Nassef Sawiris commented, “As we end the prolonged period of uncertainty, the Company will now regain its focus on growth initiatives.”
The payment follows an almost year-long dispute with the Egyptian government, in which the Board and management were faced with two choices: 1) enter in to a prolonged legal battle with unpredictable outcomes; or 2) make the payment to the government, despite the unified view by the board, management and auditors KPMG that all laws and regulations were soundly applied and followed at all times. However the Board and management concluded that a prolonged legal process would not be in the best interest of the Company’s stakeholders, including its 45,000 employees in Egypt, who represent 50% of the group’s employee base. In addition, a prolonged legal process would take up a significant part of management’s time and attention, stall our future investment and growth plans, and cause greater uncertainty for our shareholders, creditors and other stakeholders.
