Orascom Construction Ltd, the Engineering and Construction branch of Orascom Construction Industries NV (OCI), will obtain an initial public offering (IPO) in February 2015, CEO Nassef Sawiris told Daily News Egypt.
On Thursday, the company reported that its Orascom Construction will pursue a dual listing in Egypt and the United Arab Emirates, adding that “preparations for the separation of the Engineering and Construction Group from OCI NV are underway”.
The company will include all OCI NV’s construction assets and subsidiaries. The company will also own 50% stake in the BESIX Group, a group of industrial companies operating in construction, roads, infrastructure, environmental, concessions and property development.
Sawiris announced during a press conference Saturday that OCI will donate the first instalment it previously paid the Egyptian Tax Authority (ETA), approximately EGP 2.5bn, to the Long Live Egypt fund.
On 4 November, the ETA’s Independent Appeals Committee has ruled in favour of OCI NV’s subsidiary in Egypt OCI SAE.
In 2013, the company reached a settlement with the ETA, agreeing to pay EGP 7.1bn in ten instalments over the next four years. However, the prosecutor general acquitted the company from the case in 2014.The company later filed a lawsuit to challenge the tax settlement.
Sawiris said that the company had two choices – either to reclaim the first instalment’s money or to keep it with the ETA where it will used to settle payments of future taxes. The business mogul added, however, that the construction company opted to donate the money to the Long Live Egypt fund, benefiting Egyptians and the company’s shareholders.
Sawiris said that his company will be focusing on energy and infrastructure projects during the coming period.
“We’ll focus on the sectors that the market needs,” Sawiris said. “Currently, growth in Egypt doesn’t surpass 3% but around 2% can be automatically added if the energy crisis was solved.”
Prior to the 30 June uprising, Sawiris revealed that OCI sought international arbitration against the Egyptian Ministry of Petroleum following the issues Egyptian Fertilizers Company (EFC) and Egyptian Basic Industries Corporation (EBIC), OCI owned companies.
Accusations by the Egyptian government were made against OCI in 2013, arguing that the company was consuming gas with lower prices. Orascom stated that it purchased EFC and EBIC facilities, along with their gas contracts, for $2.7bn.
The company has made amendments to its gas contracts, however, following negotiations with the government.
OCI’s CEO stated that the ruling was in favour of OCI on 3 July but decided not to act upon it.
“We can’t be at a rivalry with the Egyptian government when we seek to be development partners,” Sawiris said.
The construction company is intending to commence studies to construct and develop a coal-fired power plant in cooperation with UAE-based International Petroleum Investment Company (IPIC).The total value of the project has been placed at approximately $2.5bn to $3bn, around EGP 25bn. The company believes the project’s timeframe to be four years, adding that it is expected to have a capacity of up to 2,000 MW to 3,000 MW.
So far, Orascom has contributed to the production of 8,000MW to 10,000MW in Egypt, Algeria and Iraq.
Sawiris told Daily News Egypt that 75% to 80% of the project will be financed through long term loans. He added that the contribution of OCI and the Emirati company is divided by 50%-50%, adding that cooperation of some Asian and European companies is welcomed.
Discussing investment, Sawiris said that the country needs around EGP 1.8bn each day [in investments] to substitute EGP 200bn on the wages and the EGP 200bn spent on subsidies.