OCI Jumps on Bets Tax Accord to Help Amsterdam Move: Cairo MoverAhmed A. Namatalla
Orascom Construction Industries gained the most in more than three months on speculation that a possible tax settlement would pave the way for regulatory approval of a tender offer for the shares.
Shares of Egypt’s biggest publicly traded company climbed 3.5 percent, the most since Dec. 16, to 238.27 Egyptian pounds at the close in Cairo, trimming the stock’s quarterly decline to 5.6 percent. Orascom Construction, or OCI, was the biggest gainer on the benchmark EGX 30 Index, which rose 1.2 percent.
The Egyptian Tax Authority will study an offer from OCI to settle a tax dispute for 7 billion pounds ($1 billion), Ahmed Abdel Rahman, head of the authority’s tax-evasion unit, said in a phone interview today. The settlement could help OCI secure regulatory approval for a transaction to transfer its Cairo-listed shares to NYSE Euronext Amsterdam, according to analysts including Hassan Kenawi, equities trader at Cairo-based HC Brokerage.
“Investors are speculating a settlement will help the tender offer go through,” Kenawi said by phone. “But there’s still a lot of uncertainty about how such an offer, if it’s accepted by the government, will affect tender offer price, and when it might take place.”
Omar Darwazah, OCI’s head of investor relations, declined to comment on negotiations with Egypt’s tax authorities. The government claims OCI owes 14 billion pounds of back taxes related to the 2007 sale of its cement business.