A group of US investors headed by Bill Gates is committing $1bn to the acquisition of a stake in construction and fertiliser company Orascom Construction Industries (OCI) NV, a subsidiary of OCI SAE.
OCI NV stated Friday that it is set to acquire all outstanding stock and global depository receipts (GDRs) of parent company OCI SAE through an exchange offer. The transaction targets the trade in of OCI SAE’s ordinary shares for OCI NV shares or EGP 280 per share as well as the exchange of GDRs to OCI NV ordinary shares, according to the company’s statement.
The company is to relocate from Cairo to Amsterdam and is due to begin trading on the NYSE Euronext in Amsterdam on 25 January with an American depository receipt programme to follow. OCI will continue trading on the Egyptian Exchange either directly or via an Egyptian depository programme to be launched by the company.
OCI NV stated that it has secured over $2 bn from participating investors for the sake of paying shareholders who wish to sell OCI ordinary shares for cash, $1 bn of which comes from Bill Gates’ Cascade Investment LCC, as well as Southeastern Asset Management and Davis Selected Advisers.
“This transaction is proof of the existing international appetite to invest in Egypt and bodes well for the Egyptian economy with more than $ 1 bn committed by US investors,” said CEO of OCI Nassef Sawiris in a statement.
OCI GDRs represent 75% of the company’s outstanding ordinary shares, 60% of which are owned by the Sawiris family and The Abraaj Group, who have submitted all their OCI GDRs to exchange for OCI NV shares.
Sawiris added: “OCI’s existing Egyptian operational headquarters, assets, and 45,000 Egyptian employees comprising half of the group’s global employee base stand to benefit from our expanded access to capital. We expect our new profile to positively impact the group’s ability to expand in Egypt and pursue its growth strategy.”
OCI NV’s board will comprise of two executive and three independent non-executive directors. Nassef Sawiris, OCI’s CEO, and Salman Butt, OCI’s Chief Financial Officer, will serve as executive directors. Michael Bennett, the former CEO of Terra Industries, will serve as Chairman. Jan Alberts Ter Wisch, former partner at Allen & Overy LLP, and Arif Naqvi, the founder and Group CEO of The Abraaj Group, will serve as non-executive independent directors.
OCI’s net income year-on-year saw a 30.7% percent slump in the third quarter of 2012, $127 m as opposed to to $183 m in the same quarter in 2011.