SOURCE: Orascom Construction Industries

February 21, 2008 06:18 ET

Orascom Construction Industries announces OCI/Abraaj Agreement

Cairo--(Marketwire - February 21, 2008) -


NEWS RELEASE


OCI Announces Agreement with Abraaj Capital



Cairo, Egypt - 21 February 2008:  Orascom Construction Industries ("OCI")
announced today that it has signed an agreement with United Arab Emirates 
("UAE")-based Abraaj Capital ("Abraaj"), the leading regional private equity 
firm, which has agreed to merge its fertilizer production operations under OCI 
for a combined cash and shares equity consideration of approximately US$ 1.59 
billion. OCI will also assume US$ 1.1 billion in net debt.

Transaction Highlights:

-  Abraaj has agreed to merge its fertilizer activities into OCI for a
   total cash and shares equity consideration of approximately US$ 1.59 billion.
   OCI will also assume US$ 1.1 billion in net debt.



-  A total of US$ 874.5 million in cash and the issuance of
   approximately 12.77 million new OCI shares through a capital increase to 
   Abraaj subject to approval by OCI shareholders in an Extraordinary General 
   Meeting ("EGM").



-  The capital increase shares to be issued at the price of EGP 607.93
   per share (US$ 221.1 per Global Depository Receipt) minus the upcoming cash
   dividend which is expected to be EGP 300 per ordinary share as the newly 
   issued shares shall not be entitled to the cash dividend for the fiscal year 
   ended 31 December 2007. The agreed share price reflects a 14% premium to the 
   average close since OCI announced its divestment of the cement group. 
   Following the capital increase, Abraaj shall be a 5.95% shareholder in OCI.



-  Abraaj to have one seat on OCI's Board of Directors subject to shareholder 
   approval and will be represented by Arif Naqvi (Vice-Chairman & CEO of Abraaj 
   Capital).



-  Abraaj's activities in the fertilizer and natural gas industries include:



   -  100% controlling stake in Egyptian Fertilizers Company ("EFC"), a
      free zone company, which includes a 20% stake which is already indirectly 
      held by OCI. EFC has an annual production capacity of 1.27 million tonnes 
      of ammonia/ urea which will increase to 1.47 million tonnes by 2010 
      following the implementation of a debottlenecking project. An Uhde / OCI 
      consortium also constructed the two ammonia / urea production lines at EFC 
      in 2000 and 2006 in Ain Sokhna which is located adjacent to the EBIC plant 
      in the Suez Industrial Development Park, an 8.8 million square meter 
      industrial park managed by OCI on a concession basis.



   -  EFC owns a 20% stake' in Notore Chemical Industries Limited ("NCIL"),
      which owns an ammonia / urea production plant in Nigeria with an annual
      production capacity of 0.5 million tonnes. The plant is currently being
      rehabilitated and is expected to restart production during mid 2008. NCIL 
      has sufficient gas allocation for an additional two ammonia / urea 
      production lines.



  -   a strategic alliance with UAE-based Dana Gas PJSC ("Dana Gas")- the
      Middle East's largest private sector natural gas company - which is 
      currently active in gas exploration, production, transportation and 
      marketing in the region. Dana Gas has agreements for natural gas 
      concessions and is active in gas exploration, appraisal production, and 
      supply activities across the region including in Egypt, the Kurdistan 
      Region of Iraq, and the UAE. Dana Gas' strategic alliance with Abraaj 
      Capital envisages negotiating possible future gas supply agreements for 
      fertilizer plants and other gas-intensive industries.



OCI's Current Investments in Fertilizer Production



OCI's current investments in ammonia and nitrogen-based fertilizers include a
30% stake in Egyptian Basic Industries Corporation ("EBIC") in partnership with
Kellog Brown & Root ("KBR") and the Government-owned Egyptian General Petroleum
Company ("EGPC") which is scheduled to commission a greenfield ammonia
production plant with an annual capacity of 0.8 million tonnes during the second
half of 2008. A KBR / OCI consortium is constructing the plant which is located
in Ain Sokhna adjacent to the Sokhna Port on the Red Sea. KBR is the provider of
the process technology.



OCI's investments also include a 51% stake in Sorfert Algeria in partnership
with state-owned oil & gas conglomerate Sonatrach (49% shareholder) which is
currently constructing north Africa's largest urea / ammonia production complex
with an annual production capacity of 1.3 million tonnes of ammonia / urea and
0.8 million tonnes of ammonia. The production complex is scheduled for
commissioning during end 2010. An OCI / Uhde consortium is currently
constructing the new complex which is located 60 km from the Mediterranean coast
near three major Algerian ports. Uhde is the supplier of the process technology.



Becoming a Global Leader



With the completion of the merger, the Fertilizer Group will be well on its way
to be ranked among the world's top five producers of nitrogen-based fertilizers
and ammonia with a total combined annual capacity of 4.2 million tonnes by 2010.
All of OCI's plants are all state-of-the-art production plants with long-term
natural gas supply agreements and feature a low production cost profile. OCI's
strategy includes bolstering its commercial and distribution role in the
fertilizer sector.



OCI Chief Executive Officer, Nassef Sawiris commented:



"As we have indicated previously to our stakeholders, OCI has taken successful
steps towards consolidating its investments and role in the fertilizer
production industry already achieving a leadership position. We will continue to
pursue similar opportunities including the development of downstream industries.
"



"We are pleased to have this strategic alliance with Abraaj Capital, which we
believe can add significant value and contribute to our future plans. I am
particularly pleased with having Arif Naqvi as a member of the OCI Board, as he
brings significant experience and deep knowledge of the region's dynamics."



Abraaj Capital Chief Executive Officer Arif Naqvi commented:



"We look forward to a strong strategic alliance with OCI which we believe is the
best incubator and execution vehicle for industrial and infrastructure
investments in the region, leveraging its vast construction-driven core
competencies and track record in building and managing new businesses as has
been repeatedly demonstrated by Nassef Sawiris and the OCI management team."



Advisors



Shalakany is acting as OCI's legal advisor on the merger and associated
regulatory affairs. Allen & Overy Dubai and Macfarlanes London are acting legal
advisors for Abraaj Capital.





For additional information CONTACT:



OCI Investor Relations Department: investor.relations@orascomci.com



Hassan H. Badrawi
Tel: +202 2461 1039



Omar Darwazah
Tel: +202 2461 0727
Email: omar.darwazah@orascomci.com



Ahmed Sultan
Tel: +202 2461 0914
Email: ahmed.sultan@orascomci.com



Brunswick Group LLP:


Richard Jacques
James Olley
London: +44 207 404 59 59



For additional information on OCI: www.orascomci.com



Orascom Construction Industries (OCI)
Nile City Towers - South Tower
2005A Corniche El Nil, Cairo, Egypt
OCI stock symbols: OCIC.CA / ORCI EY / OCICqL / ORSD




                      This information is provided by RNS
            The company news service from the London Stock Exchange
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