(Photo courtesy of Orascom)
Egypt-based Orascom Construction (OC) Ltd, the Engineering and Construction branch of Orascom Construction Industries NV (OCI), is one of the largest Egyptian companies which also has a strong regional presence.
OC has been awarded infrastructure projects in Saudi Arabia, in addition to securing projects in Egypt in collaboration with Emaar Misr and Palm Hills Development. OC’s mother company, OCI NV, has also signed in 2014 projects in United Arab Emirates and Qatar.
BESIX Group, 50% owned by OCI NV, signed in 2014 contracts in the UAE, Saudi Arabia and Qatar, at a value of $670m. These include implementing the infrastructure work of four bridges connecting islands in Abu Dhabi, a highway in Qatar and new Kempinski Hotel in the Saudi kingdom.
OC was founded in 1950 by Onsi Sawiris, father of Naguib, Nassef and Sameh all of whom have maintained strong commitments to the company in one way or another. Sawiris senior is said to be worth $2bn, according to a 2013 Forbes report. OC is deemed a leading engineering and construction contractor with an extensive focus on infrastructure, industrial and commercial project in the Middle East and North Africa, as well as the US.
Former parent company of OCI NV, OCI S.A.E, will be demerged into separate groups, an Egyptian fertiliser group company and an Egyptian construction group company.
The Egyptian Stock Exchange (EGX) approved in early March Orascom Construction (OC) EGX listings, with capital amounting to $105m. In November 2014, the company announced that it will obtain an initial public offering (IPO) in 2015.
OCI NV reported that its Orascom Construction will pursue a dual listing in Egypt and the United Arab Emirates, adding that “preparations for the separation of the Engineering and Construction Group from OCI NV are underway”. OC has officially applied its listing request to the Egyptian Exchange in February.
“Concurrently with the implementation of the demerger, Orascom Construction intends to offer new ordinary shares representing up to 15% of the shares to public retail investors,” the company said in an official statement. It announced it plans to have a private stock issuance for “qualified institutional investors”.
In July 2013, EGX had delisted six companies, including OC, after the Netherlands-based global nitrogen fertiliser producer OCI NV, successfully acquired 97.44% ownership.
Prior to the 30 June uprising, OCI CEO Nassef Sawiris revealed that his company sought international arbitration against the Egyptian Ministry of Petroleum. This followed issues with Egyptian Fertilisers Company (EFC) and Egyptian Basic Industries Corporation (EBIC), OCI owned companies.
Accusations by the Egyptian government were made against OCI in 2013, arguing that the company was consuming gas with lower prices. Orascom stated that it purchased EFC and EBIC facilities, along with their gas contracts, for $2.7bn.
The company has made amendments to its gas contracts, however, following negotiations with the government. OCI’s CEO stated that the ruling was in favour of OCI on 3 July, but decided not to act upon it.
“We can’t be at a rivalry with the Egyptian government when we seek to be development partners,” Sawiris said.
