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OCI targets financial reconstruction via 10% increase in capital in EGX: MD - Daily News Egypt

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OCI targets financial reconstruction via 10% increase in capital in EGX: MD

Construction works for El-Hamrawein power plant to be implemented in Q1 of 2016, participation in tunnels of New Suez Canal, says Bishai

Orascom Construction is targeting a 10% increase in capital through issuing a tender for the company on the Egyptian Stock Exchange (EGX) in March, Managing Director Osama Bishai said.

The step will be taken in order to financially restructure the company, Bishai added.

In a press conference Saturday, Bishai also said that the net debt until the end of September amounted to approximately $200m. It is expected to shrink to $75m after finalising the process of capital increase.

According to Bishai, the company signed a contract with the Ministry of Electricity to develop El-Hamrawein coal power plant, in cooperation with Emirati IPIC. The power plant provides about 3,000mW, expecting construction works to begin during the first quarter of 2016.

He said that the company is involved in serious discussions with the Engineering Authority to contribute to the implementation of three new tunnels under the Suez Canal, in cooperation with the Arab Contractors in Port Said.

He further noted that Egypt’s share of the company’s works amounted to 26.5% until now, with 43.1% for the US, 20.7% for Saudi Arabia, 3.7 % for Algeria, and 5.8% to the remaining countries.

Bishai believes the assessment of the company’s construction sector is estimated at $1.4bn-$1.5bn, adding that the current price of stocks, ranging from $13.33 to $15.3, is very tempting. He also expects that the Sawiris family will take up the same percentage in order to maintain their share of the company.

The company will remain listed in Dubai, which will increase its capital in EGX. The government is pushing towards implementing several infrastructure projects, which will leave a positive impact on the company, according to Bishai.

Bishai added that while the share will be listed in Egyptian pounds on the EGX, trading will be in dollars on the Dubai Financial Market. He said the return to Egypt through listing the company again was part of the company’s plan to benefit from the state’s subsidy for investments, particularly infrastructure projects.

He said settling the tax dispute with the Egyptian government regarding the selling of the cement sector to Lafarge has pushed the company to reinvestments in Egypt.

Bishai explained that the company will be directing increases in capital towards new projects in Egypt in both the electricity and the renewable energy sectors. This comes especially after the company received approval of the New & Renewable Energy Authority (NREA) to start projects in fields of wind and solar energy.

He went on to add that political tensions in the Middle East represent a great opportunity for new investments in the field of infrastructure due to the reconstruction required.

The company is currently implementing the “Grand Egyptian Museum” project, and establishing a fertiliser factory in the US state of Iowa.

The size of the company’s business until 30 September 2014 reached $5.6bn, excluding the projects of BESIX Company, of which Orascom owns 50%, raising business size to $7.7bn.

The size of new businesses is estimated at $3.5bn, including infrastructure projects in both Egypt and Saudi Arabia, with a cost of $2.6bn.

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