OCI NV, a Dutch fertilizers producer and construction company, said it will split next month and list shares of its building business in Egypt and on Nasdaq Dubai. The company, which is majority-owned by Egyptian billionaire Nassef Sawiris, will complete the demerger on March 7, it said in an e-mailed statement today. It will offer 15 percent of Orascom Construction Ltd. to institutional and retail investors, and plans to start trading of the new entity on Nasdaq Dubai on March 9, and on the Egyptian bourse between March 9 and 11. Sawiris relocated Orascom Construction Industries to the Netherlands from Egypt last year through a buyout by OCI, an entity he helped set up amid a tax dispute with the Islamist-led former Egyptian government. OCI's fertilizer and chemicals business will still be listed in Amsterdam. "Segregation means the companies will likely go in different directions," Allen Sandeep, director of research at Cairo-based Naeem Brokerage, said by telephone. "It gives the market a chance to value the construction entity separately in light of falling margins that it has suffered over the last two years." An Egyptian court overturned a 7 billion-Egyptian pound ($923 million) settlement between OCI's local unit and the government on charges of tax evasion, the company said in November. Sawiris said at the time that he'll boost investment in Egypt after the legal victory. He announced the same month a partnership with Abu Dhabi-based International Petroleum Investment Co. to build coal-fired power plants on the Red Sea. Weakest Link The split is intended to provide OCI's businesses with flexibility, draw a wider pool of investors, and improve management focus, the company said today. Existing shareholders will get one share in the building unit for every two they own in OCI. OCI shares dropped 0.4 percent to 30.905 euros at 1:10 p.m. in Amsterdam. The construction unit "is the weakest link under OCI's umbrella," Sandeep said. "But because of its exposure in Egypt, the outlook is becoming more positive as it's likely to get more project contracts in the power generation sector." EFG-Hermes Holding SAE, Bank of America Merrill Lynch, Barclays Plc, HSBC Bank Middle East Ltd., CI Capital and Rabobank NA are managing the process. Source: Bloomberg
