OCI Drops On Concern Regulator To Stall Relocation
Orascom Construction Industries (OCIC.CA), Egypt’s biggest publicly traded company, fell the most in almost two weeks on concern the stock market regulator may stall the builder’s planned move to Amsterdam.
Shares of Orascom, also known as OCI, fell 1.1 percent, the largest decrease since Jan. 10, to 265.94 Egyptian pounds at the close in Cairo, bringing its retreat over the last three days to 2.3 percent. Volume on the stock was almost 25 times the three- month daily average, according to data compiled by Bloomberg.
OCI said Jan. 19 it had secured $2 billion from investors led by Bill Gates’ Cascade Investment LLC to help transfer its listing from to NYSE Euronext Amsterdam. The Egyptian Financial Supervisory Authority said two days later the Cairo-based company must obtain shareholder approval for the move and explain the fate of its “commitments toward sovereign entities and creditors.” OCI’s stock was the biggest decliner today on the benchmark EGX 30 Index (EGX30), which rose 0.2 percent.
“There’s concern EFSA’s approval of delisting OCI from the market might take some time,” Heba Foda, an equities trader at Cairo-based HC Brokerage, said by phone. “Talks with the tax authority also remain as an overhang on the stock.”
OCI said today negotiations with the authority were in progress over an allegation that it owes back-taxes. The company, which also makes fertilizers, aims complete the share transfer to Amsterdam-based OCI NV within four weeks, Omar Darwazah, OCI’s investor relations manager, said Jan. 20.
Under the transaction, shareholders of the company, which comprises almost a quarter of market capitalization on the EGX 30 Index, have the option of exchanging their stakes for either stock in OCI NV or 280 pounds cash per share. The company is still committed to an “active” listing in Egypt, either directly or through Egyptian depository receipts,’’ Chief Executive Officer Nassef Sawiris said by phone Jan. 18.
Nine analysts recommend investors buy OCI’s stock, while four say to hold it and two advise on selling it, according to data compiled by Bloomberg. OCI shares have gained 19 percent over the past year, compared with a 42 percent surge for the EGX 30 Index.
Bloomberg
