OCI Climbs Most in Six Weeks After Tax Settlement: Cairo MoverAhmed A. Namatalla
Orascom Construction Industries gained the most in six weeks after Egypt’s biggest publicly traded company agreed to settle a tax dispute with the government, paving the way for a share transfer to Amsterdam.
Shares of Orascom Construction, also known as OCI, increased 3.1 percent, the most since March 21, to 240.67 pounds at the close in Cairo. The benchmark EGX 30 Index gained 1.5 percent.
OCI said on April 30 it agreed to pay about 7 billion pounds ($1 billion) over five years to settle a tax claim stemming from the company’s 2007 sale of its cement business. With the tax settlement, the company said it “expects to proceed with its filing” for a mandatory offer for the Cairo-listed shares by Amsterdam-based parent OCI NV.
“The tax agreement is better off for the company than extending the dispute for the government,” Hassan Kenawi, equities trader at Cairo-based HC Brokerage, said by phone. “Also, there’s speculation on the stock’s upside if OCI maintains its previous offer for shareholders.”
Orascom said in February that 99.9 percent of minority shareholders approved a plan giving them the option of exchanging their stakes for stock in OCI NV or selling them for 280 pounds apiece. If the company revises the offer, it will not fall below 246.6 pounds a share, the average closing price over the past three months and the minimum required by the regulator, Cairo-based investment bank Pharos Holding said in an April 30 report.
OCI said in January it secured $2 billion of commitments from investors led by Bill Gates’ Cascade Investment LLC to help finance the share transfer. The company said the move would help lower borrowing costs and boost its global profile.