Orascom Construction Set to Delist in Egypt as Buyout Accepted

Orascom Construction Industries (OCIC.CA), Egypt’s biggest publicly-traded company, moved closer to delisting in Cairo after holders of 89 percent of shares accepted a buyout offer. The stock sank the most since March.

Orascom’s parent OCI NV (OCI) closed a month-long offer yesterday to buy the 50.2 million shares of the Cairo-based company for 255 Egyptian pounds ($36.41) each or swap them for those of the Amsterdam-based fertilizer maker. Based on the results announced by the Egyptian Exchange yesterday, 1.6 percent of Orascom Construction’s shares are now available to trade in Egypt, according to a OCI statement, below the 5 percent minimum required for listing. Most of the London-listed stock has been consolidated into OCI.

Orascom, which debuted in Cairo 14 years ago, grew to a market value of 50.3 billion pounds yesterday and had a 25 percent weighting on the benchmark EGX 30 Index. Egypt’s markets regulator gave OCI’s buyout offer the go-ahead after Orascom Construction reached a 7 billion-pound ($1 billion) agreement with the government in April to settle back taxes. The stock fell 4.1 percent, the most since March 14, to 240.6 pounds and is down 4.7 percent this year.

“It looks like Orascom Construction will not continue to be listed in Egypt,” Allen Sandeep, director of research at Cairo-based Naeem Holding, said by phone. “The company could seek to maintian its listing here since Egypt is still the biggest contributer to OCI’s top and bottom lines and considering the recent changes in the political landscape.”

Egypt Investment

Billionaire Naguib Sawiris, the brother of OCI Chief Executive Officer Nassef Sawiris, said July 5 in an interview with Bloomberg TV that his family would “resume investing in Egypt” after the military ousted Islamist President Mohamed Morsi. OCI’s head of investor relations Omar Darwazah declined to comment when contacted by phone.

OCI shares, trading on Euronext Amsterdam, have climbed 28 percent since Mursi’s ouster July 3 to $34.5 on July 26.

Holders of 29.2 million Orascom Construction shares accepted the cash offer and owners of 15.7 million shares accepted swap offer, the bourse said in an e-mailed statement yesterday. OCI said yesterday it expects to hold 97.4 percent of Orascom Construction once settlement concludes within five business days.

Source: Bloomberg