Netherlands-based OCI NV announced on Monday that its construction business will be dually listed as a separate entity on Nasdaq Dubai and the Egyptian Exchange (the EGX) early next month.
That follows the formal commencement of the demerger of OCI NV’s engineering and construction business from its fertilizer and chemicals business, a move initially announced by the board in November 2014.
The demerged construction business will be called Orascom Construction, a statement said.
The demerger is expected to take place on March 7, 2015 through a $1.4 billion reduction in OCI NV’s share capital whereby its shareholders will receive one Orascom Construction share for every two OCI NV shares they own as at close of trading on March 6, 2015.
OCI NV will continue to be listed on the Euronext Amsterdam as a global producer of nitrogen fertilizers, methanol and other natural gas based chemical products, the statement added.
Orascom Construction intends to offer up to 15,758,540 new ordinary shares representing up to 15 per cent of the company to public retail investors on Nasdaq Dubai, and through a private placement to qualified institutional investors (the Egyptian offer).
EFG Hermes is acting as sponsor for Orascom Construction’s listing and trading on Nasdaq Dubai, while Bank of America Merrill Lynch, Barclays and HSBC Bank Middle East Limited are acting as joint financial advisors.
Trading on the exchange is slated to start on March 9.
For the EGX listing, EFG Hermes is acting as global coordinator and joint bookrunner, while CI Capital and HSBC Bank Middle East Limited are joint bookrunners. Rabobank is acting as the Dutch financial advisor.
The retail offer for the listing on EGX is open from March 1-4, with trading expected to begin betwen March 9- 11.
The shares will be listed and traded on Nasdaq Dubai in US dollars, and in Egyptian pounds on the EGX.
As a newly formed holding company with no current or historical operations, Orascom Construction will focus on investments in infrastructure concessions, the statement said.
It currently operates under three business units, including Cairo-based Orascom; US-based Contrack, which undertakes engineering, procurement and construction services; and Iowa-based The Weitz Company, a general contractor, design-builder and construction manager.
The company also has a 50 per cent shareholding in Brussels-based BESIX Group, which carries out commercial, industrial and infrastructure projects in 19 countries throughout Europe, the Middle East and northern and central Africa.
Osama Bishai, who served as OCI NV’s head of engineering and construction arm, will serve as Orascom Construction’s CEO. Mark Littel, who joined the group last year, will serve as CFO.
Nassef Sawiris will serve as the non-executive chairman of the seven-member board, which will also include Arif Naqvi and Salman Butt as non-executive directors.
“The board of directors of OCI NV believes that a successful demerger, and dual listing will help Orascom Construction maintain its international profile, continue to provide access to the international capital markets to better position the company for future growth, and enable the company to continue to capitalise on its position as a leading global and regional contractor to pursue the Middle East and North Africa’s resurging construction markets,” the statement said.
The creation of the new entity will lead to many benefits including streamlining the shareholder base, providing greater business clarity and more flexibility, and give access for improved growth opportunities, the company said.
It will also lead to an efficient capital structure, an enhanced credit profile, improved management focus and better align incentives, it added.