CAIRO: “I can only encourage all Orascom Hotels Development shareholders to accept the offer to exchange their shares into Orascom Development Holding (ODH) shares, and thereby support our growth strategy and benefit from ODH’s unique market position, said Samih Sawiris, chairman of Orascom Hotels.
The decision comes a day after the announcement that ODH will acquire Orascom Hotels and Development, in a bid to “create access to one of Europe’s leading capital markets, ODH said in a press statement.
The reorganization is in line with the group’s international expansion strategy, and the new Swiss holding company ODH was originally established to become the new parent company of Orascom Hotels and Development.
There will be a primary listing of Orascom Development Holding (ODH) shares on SWX Swiss Exchange (SWX) and secondary listing on the Cairo and Alexandria Stock Exchanges (CASE), the company said in a press statement.
Orascom Hotels, Orascom Telecom Holding SAE and Orascom Construction Industries, all based in Cairo, have “grown too big for the local stock markets, Sawiris told journalists in Zurich.
The move should help reach European investors who at the moment “can t or won t invest in Egypt, he added.
“The board of directors of Orascom Hotels and Development together with its majority shareholder, Samih Sawiris, decided to establish a new Swiss holding structure to reflect the Group’s increasingly international profile and create an attractive basis for further overseas growth, the company said.
“Further to this, a listing of ODH on SWX . will provide the group with better access to capital markets and increase its international awareness.
The transaction is expected to be conducted in three steps, the first of which will entail the reorganization, namely establishment of the Swiss holding structure. This will mainly affect the legal structure of the group and “will not cause any material changes to its existing operations, development projects, its employees or customers.
“The group remains committed to maintaining its strong presence in Egypt.
Since the group has already established a local footprint in Switzerland through the Andermatt project, the new international corporate headquarters will therefore be based in Altdorf.
“The group plans to transfer its finance, treasury and investment control functions to its new corporate headquarters, the company said.
ODH will offer Orascom Hotels and Development shareholders a share swap option at a ratio of 10:1 (one ODH share for every ten OHD shares).
“Ahead of the exchange offer, ODH has received irrevocable undertakings of acceptance to swap of approximately 76 percent, including from the Sawiris family, according to the statement.
The exchange offer is expected to be launched on or around March 30, subject to regulatory approval, and will remain open for 20 business days until or around April 24.
In accordance with Egyptian law, the exchange offer will also include a cash alternative.
Following the settlement of the public exchange offer, around May 6, ODH intends to be listed on SWX the following day, and plans a secondary listing on CASE shortly after.
Orascom Hotels and Development will remain listed on CASE.
All Orascom Hotels and Development shareholders who do not tender their shares into the offer will continue to be able to trade their shares on CASE.
The company said it may “decide to offer new shares concurrent to its listing in Switzerland.
“Both, the new holding structure and the listing in Switzerland will . strengthen the group’s financial position, international standing and facilitate further expansion with the aim to grow through targeted acquisitions and the development of land banks globally, said the company.
Established in 1989, Orascom Hotels and Development is an integrated town developer in Egypt and the Middle East, with its main projects El Gouna and Taba Heights.
In 2006, Orascom Hotels and Development achieved a turnover of LE 862 million and a net profit of LE 214 million. The company has been listed on the CASE since 1998 and has a market capitalization of LE 19.1 billion.
Swiss-based UBS is acting as sole financial advisor on the listing on the Swiss Stock Exchange and Egypt-based Beltone Investment Banking is acting as sole advisor on the listing on the Cairo and Alexandria Stock Exchanges.
