Orascom Construction To Raise Up To $241m In Egypt Share Offer

Orascom Construction plans to raise as much as $241 million in a sale of new shares in Egypt over the next few weeks, in a move that could help to re-energise Cairo’s stock market after years of political and economic turmoil.

The company, which will offer up to 15.8 million new shares representing 15 per cent of its ordinary equity capital, said on Thursday that it would price the shares at between $13.33 and $15.23 each.

A bookbuilding process to determine the final price for institutional investors starts this Thursday and will end next Thursday, Orascom Construction said. Retail investors will then be offered shares between March 1 and 4 at the same price.

The engineering and building giant, controlled by Egypt’s billionaire Sawiris family, was once the biggest blue chip on the Egyptian Exchange. But it effectively pulled out of the bourse in 2013 when another Sawiris company, Amsterdam-listed OCI NV, bought out the vast majority of its shares, leaving only a tiny free float in Cairo.

The buy-out was seen as a response by the Sawiris family to tough conditions under Islamist President Mohamed Mursi. The economy deteriorated and some members of the family were barred from leaving the country as part of a probe into tax evasion.

Now the economy is recovering under President Abdel Fattah al-Sisi, a former army general who oversaw Mursi’s overthrow, and with the tax issue resolved, the Sawiris family plan to move the primary listing of their construction assets back to Cairo.

Orascom Construction is being spun off from OCI NV, which will retain its fertiliser and chemicals business. The construction firm plans to have a dual listing on the Egyptian Exchange and NASDAQ Dubai.

It would be the first listing of an Egyptian stock on NASDAQ Dubai, the smaller of Dubai’s two exchanges. Political and investment ties between Egypt and the United Arab Emirates have deepened since Sisi took office in 2014.

NASDAQ Dubai agreed with Egypt’s securities clearing house last year to promote cross-listings, while UAE investors will be able to clear their trades in Egyptian stocks via NASDAQ Dubai, reducing risk.

Egypt’s stock market has surged 40 percent since the end of 2013 but fund managers believe that to attract much more foreign capital, the $68 billion market will need to list more blue chips.

EFG Hermes, CI Capital Investment and HSBC are joint bookrunners for the Egyptian share offer, while EFG Hermes is sponsoring the Dubai listing and Bank of America Merrill Lynch, Barclays and HSBC are advisers for it.