SOURCE: Orascom Construction Inds, S.A.E.

April 30, 2012 05:01 ET

OCI Receives Approval From EFSA to call for an EGM

CAIRO--(Marketwire - Apr 30, 2012) -

Cairo, Egypt / 30 April, 2012 8:30 AM

OCI Receives Approval from EFSA to call for an EGM to Approve the
Demerger of the Company's Construction Business from its Fertilizer

Orascom Construction Industries (OCI or the Company) announced today
that it has received approval from the Egyptian Financial Supervisory
Authority (EFSA) to call for an Extraordinary General Meeting (EGM) to
approve the demerger of the company's construction business from its
fertilizer business.

The EGM date has been set at 17 May 2012. The EGM Notice to
shareholders including the agenda of the general meeting's resolutions
and an information statement will be made available on the corporate
website at  starting tomorrow 1 May 2012.

The Demerger Proposal

The Board of Directors of OCI (the Board) has decided to submit a
proposal to the EGM to demerge the Company along its business lines of
construction and fertilizers into two separate and independent legal
entities in accordance with the Companies Law No. 159 of 1981 and the
other laws, decrees and regulations of relevance. The Board believes
that this demerger will effectively position each business to
capitalize on its growth opportunities and to create value for

This proposal contemplates demerging the Company into two companies,
whereby all of the fertilizer business/companies will continue to be
owned by the Company, which will be renamed OCI Fertilizers S.A.E (OCI
Fertilizers) after completion of the demerger, and all of the
construction business/companies (the Demerged Assets) will be
transferred to a new demerged company to be called Orascom Engineering &
Construction S.A.E. (Orascom Engineering & Construction). The
demerger of assets and liabilities between OCI Fertilizers and Orascom
Engineering & Construction will be executed on the basis of book value
according to the audited financial statements of the Company for the
financial year ended 31 December 2011.

The demerger will becarried out by the reduction of the par value of
the issued shares of the Company and the issuance of new shares in
Orascom Engineering & Construction equal to the amount deducted from
the par value of the Company's shares. Upon completion of the demerger,
each shareholder as of the record date will continue to hold his shares
in the Company and will also receive shares of Orascom Engineering &
Construction in a one-for-one ratio free from payment for such
additional shares. Accordingly, the shareholder base of both OCI
Fertilizers and Orascom Engineering & Construction immediately
following the demerger will be identical to the shareholder base of the

The same approach will apply to the holders of the Company's American
Depository Receipts (ADRs) and Global Depository Receipts (GDRs).
Orascom Engineering & Construction intends to establish a GDR program
and an ADR program while OCI Fertilizers will continue to trade through
the existing ADR and GDR programs. Eligible holders of the Company's
ADRs and GDRs will receive an equal number of ADRs and GDRs of Orascom
Engineering & Construction free from payment for such securities.

Rationale for the Proposed Demerger

The Company's construction business is one of the largest in the region
with construction activities spanning more than 25 countries. The
Company has also been developing its international fertilizer business.
Since 2010, the fertilizer business has grown strongly and it has
overtaken the construction business in terms of overall EBITDA and net
income contribution to the Company. For the full year ended 31 December
2011, 69.5% of consolidated EBITDA and 71.9% of consolidated net income
of OCI was contributed by the fertilizer business while 30.5% of
consolidated EBITDA and 28.1% of consolidated net income was
contributed by the construction business.

Fertilizers and construction offer distinct value propositions to
investors. Given the growth in size of the fertilizer business and its
contribution to the overall operating profits, the Company's Board of
Directors believes that it is the right time to demerge the
construction business from the fertilizer business. This demerger
should enhance investor understanding and transparency of the
businesses and allows each business to pursue its independent
development strategy. The Board envisages the benefits of this demerger
will include:

*   Share liquidity:Creates two separately listed companies offering
    discrete investment propositions, each with clear market
    valuations. This should serve to attract a wider investor base, and
    therefore liquidity, in each company's shares.

*   Business transparency: Allows for a better understanding of
    each company's business, prospects and impact of sector-focused
    events on its performance.

*   Flexibility: Provides greater flexibility for both groups to manage
    their own resources and pursue strategies appropriate to their

*   Growth opportunities: Allows each business to participate actively
    in consolidation opportunities in their respective markets.

*   Efficient capital structure: Enables each business to adopt a
    capital structure, balance sheet and financing strategy which more
    efficiently meet its individual requirements.

*   Enhanced Credit Profile: Improves lenders' ability to evaluate each
    independent businesses, thereby increasing balance sheet

*   Improved management focus: Sharpens management focus, helping the
    two businesses to maximize their performance and make full use of
    their available resources.

*   Alignment of incentives: Aligns management's and employees'
    rewards more directly with business and stock market performance,
    helping to attract, retain and motivate the best people.

Description of the Demerger Process

The proposed demerger is conditional upon, among other things, the

*   the approval by the shareholders of the Company of the demerger at
    the EGM scheduled to be held on May 17 2012; and

*   the approval of EFSA on the capital decrease of the Company and the
    issuance of the shares of Orascom Engineering & Construction; and

*   the approval by the General Authority of Financial Investments
    (GAFI) at their discretion

Shareholders may review all documents related to the EGM scheduled on
the Company's website and/or at the Company's headquarters. These
documents include: the demerger contract, the detailed demerger
proposal, the audited pro forma standalone financial statements for the
financial year ended 31 December 2011 for each business including the
auditor's report, and the unaudited proforma consolidated financial
statements for OCI Fertilizers and Orascom Engineering & Construction.

The Company will demerge the assets by way of a legal demerger as per
the related laws, particularly the Companies Law No. 159 of 1981 and
Tax Law No. 91 of 2005 as amended and all relevant decrees and
regulations. Through the demerger, the Company will be demerged into
two companies with exactly the same shareholders (subject to applicable
legal restrictions) as of a certain date (the "Demerger Date")
depending on the date of the final approval of the demerger by GAFI.
This date will be communicated to the Company's shareholders at a later

The following key steps will be implemented once required approvals
from shareholders, GAFI, and EFSA have been obtained and all other
procedural requirements have been satisfied:

*   The Company Demerger:under Egyptian law, upon completion of the
    legal demerger of the Company whereby the Company is demerged into
    two companies, Orascom Engineering & Construction, a newly
    incorporated company, will hold the Company's Demerged Assets while
    OCI Fertilizers will continue to hold all remaining assets and
    liabilities of the Company. Subject to applicable legal
    restrictions, the shareholding structure of OCI Fertilizers and
    Orascom Engineering & Construction following the execution of the
    demerger will mirror that of the Company as of the Demerger Date.

*   Continued Listing of OCI Fertilizers on the EGX: promptly after the
    issuance of GAFI's final approval of the demerger, the trading of
    the Company's shares will then be suspended until the demerger is
    completed. To the extent required by applicable law or regulation,
    the Company will request the suspension of trading of the Company's
    GDRs on the London Stock Exchange and/or the Company's ADRs on the
    NASDAQ OTC BB for an equivalent period. Trading for OCI Fertilizers
    will resume simultaneously once the trading of Orascom Engineering &
    Construction commences.

*   Listing of Orascom Engineering & Construction on EGX and the
    establishment of new GDR and ADR programs: the listing of Orascom
    Engineering & Construction on the Egyptian Stock Exchange will occur
    promptly after the execution of the demerger. The shares of Orascom
    Engineering & Construction are expected to start trading
    simultaneously with OCI Fertilizers. Additionally, Orascom
    Engineering & Construction intends to establish a GDR program and
    an ADR program concurrently with its listing on the EGX. The
    Company expects that these programs will be effectively the same as
    the current GDR and ADR programs and that the Bank of New York
    Mellon will remain the depositary bank.

Management of OCI Fertilizers and Orascom Engineering & Construction

Nassef Sawiris will serve as Chairman and CEO of OCI Fertilizers and
Salman Butt and Renso Zwiers will serve as CFO and COO respectively.
Nassef Sawiris will serve as Chairman of Orascom Engineering &
Construction and Osama Bishai and Sherif Tantawy will serve as CEO and
CFO respectively. For more details on the management team for each
business, please refer to the information statement on the Company's
corporate website.

Proforma Financial Highlights, Capital Structure and Dividend Policy

OCI Fertilizers
Unaudited Proforma Consolidated Figures

USD Millions               2011           2010           2009

Revenue                 2,376.5        1,462.1          479.3

EBITDA                    976.9          555.7          292.4

Net Income                694.4          353.3          207.4

Net Debt                2,631.9        2,411.9        1,851.6

Shareholders' Equity    2,008.2        2,034.0        1,921.0

Orascom Engineering & Construction
Unaudited Proforma Consolidated Figures

USD Millions               2011           2010           2009

Revenue                 3,225.8        3,492.9        3,404.3

EBITDA                    443.5          523.6          503.2

Net Income                214.7          279.6          302.6

Net Debt                  (39.6)        (354.8)        (473.1)

Shareholders' Equity    1,085.4        1,069.1        1,065.8

The Company does not require any material long term refinancing
activities as a result of the demerger. Working capital facilities for
the construction business shall be repositioned according to the

It is expected that each independent business shall maintain a biannual
dividend policy subject to confirmation from each Board of Directors.

Strategy Synopsis

Upon demerger, each business will pursue its own growth strategy. These
strategies are outlined below:

Orascom Engineering & Construction intends to:

*   continue to focus on growth markets

*   expand EPC capability in areas where the business has developed core
    competencies such as power, petrochemicals and transportation

*   maintain healthy profitability and backlog, growth rates and
    positive free cash flow

*   identify and pursue new investment opportunities that provide
    scalable platforms and potential further scope for growth

OCI Fertilizers intends to:

*   develop greenfield nitrogen fertilizer plants in strategic markets

*   pursue strategic acquisitions that offer attractive synergies and
    add value propositions

*   expand and diversify a portfolio of nitrogen-based fertilizers and
    associated derivatives

*   develop a global and efficient distribution network for the
    business' products in strategic markets


Citi, Zulficar & Partners Law Firm, Allen & Overy LLP and KPMG have
been retained to advise OCI in relation to this transaction.

Important Notice

This announcement does not comprise a prospectus relating to the
Company or Orascom Engineering & Construction. It does not constitute
or form part of any offer of securities, or constitute solicitation of
any offer of securities. You should not purchase or subscribe for
securities referred to in this announcement on the basis of any
information contained in this announcement.

This announcement does not constitute a recommendation concerning the
demerger and should not be construed as legal, business, tax or
investment advice. The value of shares can go down as well as up. Past
performance is not a guide to future performance.

This announcement does not constitute an offer of any securities for
sale in the United States or in any other jurisdiction where such offer
or solicitation is unlawful. The issuance of any securities referred in
this announcement will not be registered under the U.S. Securities Act
of 1933, as amended (the "Securities Act"), or with any securities
regulatory authority of any state of the United States or other
jurisdiction, and the securities may not be offered, sold, pledged or
otherwise transferred unless they are registered under the Securities
Act or pursuant to an exemption from, or in a transaction not suspect
to the registration requirements of the Securities Act and applicable
state securities laws.

This announcement contains certain forward-looking statements. Such
forward-looking statements involve risks and uncertainties that could
significantly affect expected results and are based on certain key
assumptions. Many factors could cause actual results to differ
materially from those projected or implied in any forward-looking
statements. Due to such uncertainties and risks, readers are cautioned
not to place undue reliance on such forward-looking statements, which
speak only as of the date hereof. The Company disclaims any obligation
to update any forward-looking statements contained herein, except as
required pursuant to applicable law.

Citigroup Global Markets Limited, which is regulated in the UK by the
Financial Services Authority, is acting for the Company as financial
adviser in connection with the demerger and for no one else and will
not be responsible to any other person for providing the protections
afforded to its clients, or for providing advice in relation to the

About Orascom Construction Industries

OCI is one of Egypt's largest corporations employing more than 72,000
people in 35 countries around the globe. The OCI Fertilizer Group owns
and operates nitrogen fertilizer plants in Egypt, the Netherlands, the
United States, and Algeria and has an international distribution
platform spanning from the Americas to Asia. The OCI Fertilizer Group
ranks among the world's top fertilizer producers with a production
capacity which will exceed 7.0 million metric tons in 2012. The OCI
Construction Group provides international engineering and construction
services primarily on infrastructure, industrial and high-end
commercial projects in Europe, the Middle East and North Africa for
public and private clients. The OCI Construction Group ranks among the
world's top global contractors.
For additional information contact: For additional information on OCI:

OCI Investor Relations Department: 

Omar Darwazah                       OCI stock symbols: OCIC.CA /

Erika Wakid
Email:     Orascom Construction Industries(OCI)
                                    Nile City Towers - South Tower
                                    2005A Corniche El Nil
Hassan Badrawi                      Cairo, Egypt

Tel: +202 2461 1036/0727/0917
Fax: +202 2461 9409

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