OCI Gains Most in 3 Weeks on Gavilon, Contract Wins: Cairo Mover
Orascom Construction Industries (OCIC) rose the most in three weeks after posting the highest amount in building contract awards in almost four years and revealing it was close to selling a stake in Gavilon Group LLC.
Orascom gained 2.6 percent, the biggest intraday rise since March 6, to 257 Egyptian pounds at 11:25 a.m. in Cairo, valuing the company at 53.2 billion pounds ($8.8 billion). The benchmark EGX 30 Index (EGX30) increased 2.1 percent.
The sale of its 16.8 percent stake in Nebraska-based Gavilon is “imminent,” Chief Executive Officer Nassef Sawiris said by phone today. The company is also looking to divest a 13.5 percent holding in Nigeria’s Notore Chemical Industries Ltd. which is preparing for an initial public offering.
“We can use the money toward growing the company,” said Sawiris. Orascom had bought a 20 percent stake in Gavilon in 2008 for $340 million to boost its fertilizer and agricultural supply business.
Orascom secured $1.58 billion in construction contracts in the fourth quarter, including an $810 million agreement to build the Egyptian Grand Museum.
“All the countries we’re operating in are accelerating government infrastructure spending,” Sawiris said, referring to the United Arab Emirates, Saudi Arabia, Qatar and Iraq. The company’s construction backlog will continue to grow, he said.
Fourth-quarter profit fell 34 percent to $122.6 million because of one-off charges including an early debt repayment, the company said today in a statement on its website. That compares with the $172.1 million average of four analyst estimates compiled by Bloomberg.
Orascom said it expects to hold a shareholder meeting next month to seek approval for splitting the company in two, separating its construction and fertilizer businesses.
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