OCI N.V. (OCINY: OTCQX International Premier) | OCI N.V. to Effect Demerger on 7 March 2015

OTC

OCI N.V. to Effect Demerger on 7 March 2015

Feb 16, 2015

OTC Disclosure News Service

Geleen, Netherlands

OCI N.V. to Effect Demerger on 7
March 2015

Engineering Construction
Group “Orascom Construction” to List on NASDAQ Dubai and Egyptian Exchange

OCI N.V. (Euronext: OCI) announced today that it has
formally commenced proceedings to effect a demerger of the company’s
engineering and construction business from its fertilizer and chemicals
business (the
Demerger), which was
previously announced by the Board of Directors on 6 November 2014. The demerged
construction business will be called Orascom Construction and will be dually
listed on NASDAQ Dubai and the Egyptian Exchange
(the EGX).

The Demerger is expected to take place on 7 March
2015 through a USD 1.4 billion reduction in OCI N.V.’s share capital whereby
OCI N.V. shareholders will receive one Orascom Construction share for every two
OCI N.V. shares they own as at close of trading on 6 March 2015 (the
Record
Date
, subject to regulatory approval).

The
Demerger will result in OCI N.V. continuing to be listed on the Euronext
Amsterdam as a global producer of nitrogen fertilizers, methanol and other
natural gas based chemical products.

Orascom
Construction Limited (OC or Orascom Construction) (ISIN: AEDFXA14NUL7) will be dually listed on
NASDAQ Dubai and the EGX as a global engineering and construction company.

With
respect to the Admission to listing
and trading on NASDAQ Dubai, EFG Hermes is
acting as Sponsor. Bank of America Merrill Lynch, Barclays
and HSBC Bank Middle East
Limited are acting as Joint Financial Advisors. With respect to the
admission to listing and trading
and the o
ffering
of shares on the EGX, EFG Hermes is acting as Global Coordinator and Joint
Bookrunner, CI Capital and HSBC Bank Middle East Limited are acting as Joint
Bookrunners. Rabobank is acting as Dutch Financial Advisor.

Expected timetable of key events[1]

The
expected key dates for the Demerger, Admission and the Egyptian Offer are as
follows:

·        
Institutional Bookbuilding Process  – 19 to 26 February 2015

·        
Opening date for Egyptian Offer (retail)
period – 1 March 2015

·        
Closing date for Egyptian Offer (retail)
period – 4 March 2015

·        
Demerger Record Time – 6.00 p.m.
(Amsterdam time) on 6 March 2015

·        
Demerger Effective Date – 7 March 2015

·        
OCI N.V. to trade on Euronext Amsterdam
ex-Orascom Construction – 9 March 2015

·        
Admission to the Dubai Financial
Services Authority (the DFSA)’s Official List – 9 March 2015

·        
Admission to trading on NASDAQ Dubai – 9
March 2015

·        
Issue, delivery and settlement of the
Demerger Shares – 9 March 2015

·        
First trading date on NASDAQ Dubai – 9 March 2015

·        
Admission to listing and trading on the
EGX – 9 to 11 March 2015

Orascom
Construction may adjust the dates set out above, and all other times and
periods referred to throughout this announcement. If
Orascom
Construction

should decide to adjust dates, times or periods, it will notify NASDAQ Dubai
and the DFSA as well as the Egyptian Financial Supervisory Authority (the EFSA)
and the EGX and will issue a subsequent press release accordingly.

Rationale for the Demerger

The
board of directors of OCI N.V. believes that completion of the Demerger,
establishing Orascom Construction as the parent company of the construction
business and admitting the ordinary shares of Orascom Construction (the Shares) to listing and trading on
NASDAQ Dubai and the EGX will have many benefits for OCI N.V. and its
stakeholders including:

·        
Streamline shareholder base: Creates two
separately listed pure-play companies offering distinct investment
propositions, each with clear market valuations. This should serve to attract a
wider investor base in each company’s shares and benefit liquidity in such
listed shares.

·        
Business Clarity: Allows for a better
understanding of each company’s business, prospects and the impact of
sector-focused events on its performance.

·        
Flexibility: Provides greater
flexibility for each business to manage its own resources and pursue strategic
options appropriate to their markets.

·        
Growth opportunities: Allows each
business to actively participate in consolidation opportunities and
value-accretive partnerships and joint ventures in their respective markets.

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

·        
Enhanced credit profile: Improves
lenders’ ability to evaluate each independent business, thereby increasing
balance sheet effectiveness.

·        
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.

The
board of directors of OCI N.V. believes that a successful Demerger, and dual
listing will help Orascom Construction maintain its international profile,
continue to provide access to the international capital markets to better
position the Company for future growth, and enable the Company to continue to
capitalize on its position as a leading global and regional contractor to
pursue the Middle East and North Africa’s resurging construction markets. The
timing coincides with record 38% growth in backlog as at 30 September 2014 as
compared to 31 December 2013.

Implementation of the Demerger and the
Egyptian Offer

The
Demerger will be implemented by OCI N.V. carrying out a reduction of its share
capital. At an extraordinary general meeting of shareholders of OCI N.V. held
on 12 November 2014, such shareholders approved the proposal to reduce the
share capital of OCI N.V.
by approximately USD 1.4 billion to facilitate the Demerger.
On 16 January 2015, the creditor objection period in relation to the
resolutions passed on 12 November 2014 expired without any objections being
made.

The
consideration for the capital reduction will be the transfer by OCI N.V. of the
shares held by OCI N.V. in Orascom Construction to those shareholders of OCI
N.V. who are shareholders of OCI N.V. at 6.00 p.m. (Amsterdam time) on 6 March
2015 (the Demerger Record Time).
Each shareholder of OCI N.V. at the Demerger Record Time will receive one
ordinary share in Orascom Construction (a Demerger
Share
) in respect of every two OCI N.V. shares held. Any fractional
entitlements will be sold in the market and the proceeds will be remitted to
the relevant OCI N.V. shareholder. Subject to these sales of fractional
entitlements, shareholders in OCI N.V. at the Demerger Record Time will hold the
same proportion of Shares in Orascom Construction as they held in OCI N.V. at
the Demerger Record Time.

Unless
a shareholder of OCI N.V. notifies OCI N.V. otherwise, the relevant Demerger
Shares will be credited to the Euroclear/Clearstream account of the relevant
shareholder of OCI N.V at the Demerger Record Time. As all shares in OCI N.V.
are held in uncertificated form, Orascom Construction will not issue share
certificates in respect of Demerger Shares to shareholders of OCI N.V. at the
Demerger Record Time.

Orascom
Construction will apply for the Demerger Shares to be admitted to the Official
List of Securities of the DFSA and
to trading on NASDAQ Dubai (Admission).

Concurrently
with the implementation of the Demerger, Orascom Construction intends to offer
up to 15,758,540 new ordinary shares representing up to 15% of the Shares (the New Shares) to public retail investors,
and through a private placement to qualified institutional investors (the Egyptian Offer).  The Egyptian Offer will not be made on a
pre-emptive basis. The completion of the Egyptian Offer is conditional on
obtaining the necessary approvals from the
EFSA and the EGX. The pricing of
the Egyptian Offer will be determined via a bookbuilding process with qualified
institutional investors who are clients of the Global Coordinator or the Joint
Bookrunners (
the Qualified Institutional
Offering
).
Public retail investors will be offered the opportunity to subscribe for shares
at the same price that is set for the Qualified Institutional Offering (the Public Retail Offering). Details of the
Egyptian Offer
will be included in an English language Offering Circular in respect of the
Qualified Institutional Offering, and Arabic language Public Offering Notice in
respect of the Public Retail Offering.

Orascom
Construction will apply for the New Shares to be admitted to the Official List
of Securities of the DFSA and to trading on NASDAQ Dubai. The Shares will be
listed and traded on NASDAQ Dubai in United States dollars. Orascom
Construction will also apply for the Demerger Shares and the New Shares to be
admitted to listing and trading on the EGX (the EGX Listing). The EGX Listing is subject to applicable rules and
regulations of the Egyptian Capital Markets Law and the Listing and Delisting
Rules applicable to listing of foreign shares on the EGX. The Shares will be
listed and traded on the EGX in Egyptian Pounds. The Shares traded on NASDAQ
Dubai will be fungible with the Shares traded on the EGX subject to the
procedures of regulators in Egypt.

Orascom
Construction will publish a prospectus to be approved by the DFSA in connection
with
the
a
dmission to the Official
List of Securities of the DFSA and

admission
to
trading on
NASDAQ Dubai of the Demerger Shares and the New Shares.

The Demerged Entity: Orascom
Construction (ISIN: AEDFXA14NUL7)

Orascom
Construction (ISIN: AEDFXA14NUL7)  is a
company limited by shares incorporated in the Dubai International Financial
Centre (the DIFC) on 18 January
2015, with its headquarters in the DIFC, Emirate of Dubai in the
United
Arab Emirates
.
As the holding company for the demerged engineering and construction assets
that have been transferred to it prior to the Demerger (the Group), Orascom Construction is a newly
formed holding company with no current or historical operations.

The
Group is an international engineering and construction contractor focused on
large-scale infrastructure, complex industrial and high-end commercial projects
in the Middle East, Africa, the United States and Central Asia for public and
private clients. Orascom Construction will also focus on investments in
infrastructure concessions.

The Group’s roots extend back to 1950, and the founding of
Orascom Onsi Sawiris Co as a general contracting and trading company in
1976. Since then, Orascom Construction has grown to a leading international
contractor and construction firm as a result of a strong management team and a
significant track record of executing large-scale complex construction
projects. The Group has consistently ranked among the world’s top contractors
and was ranked number 67 on ENR’s Top 225 International Contractors list
published on 28 August 2014.

Orascom Construction has an extensive track record of
successful timely and efficient execution of large, complex and demanding private
and public sector projects in accordance with international quality and safety
standards. The Group has executed projects in more than 20 countries across
infrastructure, industrial and commercial sectors.

Orascom
Construction currently operates under three business units, encompassing their
respective operating and non-operating subsidiaries. The business units consist
of:

·        
Orascom: established in 1976 with origins
dating back to 1950 and based in Cairo, Orascom is an engineering, procurement
and construction contractor with over 60 years of construction experience
targeting large industrial, commercial and infrastructure projects for public
and private clients principally in the MENA region and the United States.

·        
Contrack: established in 1985 and based in
McLean, Virginia, Contrack undertakes engineering, procurement and construction
services, as well as facilities operation and maintenance primarily on
institutional and infrastructure projects throughout the Middle East and
Central Asia.

·        
The Weitz Company: established in 1855, Weitz
is a leading general contractor, design-builder and construction manager based
in Des Moines, Iowa. Weitz targets commercial, industrial, infrastructure, and
plant services construction projects in the United States, and is the largest
contractor in the state of Iowa.

Orascom
Construction also has a 50% shareholding in the BESIX Group. Established in
1909 and based in Brussels, the BESIX Group is an engineering, procurement and
construction contractor and undertakes major commercial, industrial and
infrastructure projects in 19 countries throughout Europe, the Middle East and
northern and central Africa. The BESIX Group is accounted for as an associate
company using the equity method of accounting.

Orascom
Construction also has certain majority and minority stake investments in
manufacturers of fabricated steel products, glass curtain walling, paints and
concrete pipes as well as investments in two property management companies and
a waste water treatment plant concession. Orascom Construction also has
interests in a further 13 operating subsidiaries.

Entrepreneurial
Investment Track Record

Orascom
Construction’s management team has a long-standing reputation in the
construction industry and a proven entrepreneurial track record. Over the last
15 years, Orascom Construction has incubated several value accretive
businesses, including:

·                    
Cement: developed a top 10
global cement producer primarily through Greenfield projects in over 10
countries until its divestment in December 2007.

·                    
Ports: held a strategic stake in a key port in
Egypt on a Build-Own-Operate (BOT) basis,
which was divested in 2007.

·                    
Fertilizers and Chemicals: built three of OCI
N.V.’s operating plants in Egypt and Algeria, and in the construction phase for
two production complexes in the United States, which will help transform the
business of OCI N.V. to a top three global nitrogen fertilizer producer.

·                    
Orasqualia (50/50 joint venture
with Aqualia): developed, designed, financed and constructed the New Cairo
Wastewater Treatment plant, Egypt’s first Public Private Partnership (PPP)
project. Orasqualia is operating and maintaining the 250,000 cubic meter per
day wastewater treatment plant for the duration of the contract. Orasqualia’s
success established a blueprint for Egypt’s PPP legislation and won several
international awards.

In line with its strategy to pursue
strategic value accretive investments that provide the Group with revenue
visibility and stable cash flows, the Group has signed on 4 November 2014, a
memorandum of understanding with the International Petroleum Investment Company
(IPIC) to commence studies to develop, construct and operate a 2,000 to 3,000
Megawatt (MW) coal-fired power plant in Egypt. On 12 November 2014, a
memorandum of understanding with the Egyptian government to formalize the
parties’ cooperation was also signed.

 

 

Backlog

As at 30 September 2014, the Group’s combined backlog stood
USD 5.6 billion, a record high level, representing a growth of 38.6% over the
same period in 2013.The Group pursues new awards in key markets with a
promising bidding pipeline.

The Group’s recent backlog[2]
evolution is as follows:

SHAPE
* MERGEFORMAT
Management and Board of
Directors

Osama
Bishai will serve as Chief Executive Officer, continuing his leadership of the
former parent’s engineering and construction arm. Mark Littel, who joined the
Group last year, will serve as Chief Financial Officer.

Orascom
Construction will have a seven member board consisting of executive,
non-executive and independent non-executive directors. Nassef Sawiris serves as
non-executive Chairman, Osama Bishai serves as an executive officer, and Arif
Naqvi and Salman Butt serve as non-executive directors. Sami Haddad, Khaled
Bichara, and Azmi Mikati will serve as independent non-executive directors. Each
of the board committees (audit, remuneration and nomination) to be formed will
be chaired by an independent non-executive director.

For
more information about Orascom Construction and its activities, and about the
Demerger please visit www.orascom.com.

OCI
N.V. (Euronext: OCI) Following the Demerger

OCI
N.V. (Euronext: OCI) will continue to be the holding company for its
fertilizer and chemicals activities. Following the demerger, OCI N.V. will be a
global producer of nitrogen fertilizers, methanol and other natural gas based
chemical products, serving agricultural and industrial customers from the
Americas to Asia. OCI N.V. will continue to rank among the world’s largest
nitrogen fertilizer producers with current production capacity of 7.5 million
metric tons in the Netherlands, the United States, Egypt and Algeria. OCI N.V.
will also continue to be the largest global melamine producer and the largest
merchant methanol producer in the United States.

Following
the demerger, OCI N.V.’s operating business units comprise:

·        
OCI Nitrogen (100% owned): one of
Europe’s largest integrated nitrogen fertilizer and melamine production sites.
It is capable of producing well over 2 million metric tons of sellable
fertilizer and chemicals products annually through eight interconnected plants
located on a fully integrated production site in Geleen, the Netherlands,
complemented by additional melamine production facilities in China. OCI
Nitrogen’s product portfolio primarily includes calcium ammonium nitrate,
ammonia
, urea
ammonium nitrate, and melamine.

·        
OCI Partners LP (79.04% owned) (NYSE:
OCIP): a master limited partnership (MLP) that owns and operates OCI Beaumont,
an integrated methanol and ammonia production facility that is strategically
located on the Texas Gulf Coast near Beaumont. The MLP is headquartered in
Nederland, Texas.
The facility is currently undergoing a debottlenecking program that
will increase methanol and ammonia production capacities by 25% and 15% to 0.9
mtpa and 0.3 mtpa respectively.

·        
Sorfert Algérie (51% owned): the largest
integrated nitrogen fertilizer producer in Africa, capable of producing 1.2
million tons of urea and 1.6 million tons of gross anhydrous ammonia per year.
The greenfield plant was constructed by Orascom Construction.

·        
Egyptian Fertilizers Company (100% owned): a 1.55
million metric ton per year granular urea plant located in Ain Sokhna, Egypt.
The facility also includes a 325 thousand metric ton per year urea ammonium
nitrate blending unit, which was added on-site in 2010. The greenfield plant
was constructed by Orascom Construction.

·        
Egypt Basic Industries Corporation (60% owned): a 0.73 million
metric ton per year anhydrous ammonia plant located in Ain Sokhna, Egypt. The
plant also owns and is connected by pipeline to two 40 thousand metric ton
refrigerated ammonia storage tanks next to the loading jetty at Sokhna Port.
The greenfield plant was constructed by Orascom Construction.

OCI
N.V. is also constructing two greenfield
production complexes in the United States:

·        
Iowa Fertilizer Company (100% owned): nitrogen
fertilizer complex currently under construction by Orascom Construction in
Wever County, Iowa. Scheduled for commissioning in late 2015, the plant is
expected to produce north of 1.5 – 2 million tons of nitrogen fertilizers and
diesel exhaust fluid per year. The plant is the first world scale natural
gas-based fertilizer plant built in the United States in nearly 25 years. As at
31 December 2014, the plant was 84.32% complete.

·        
Natgasoline LLC (100% owned): methanol
production complex under construction by Orascom Construction in Beaumont,
Texas. The world-class plant is expected to have a capacity of up to
approximately 1.75 million metric tons per year, and is expected to start
production in late 2016. It will be the largest methanol production
facility in the US based on
nameplate capacity.

OCI
N.V. is also a global distributor of nitrogen fertilizers primarily
through its
wholly owned trading arm

OCI Fertilizer Trading (OFT)
, benifitting from strategic access to
ports in Europe, North Africa, and the US Gulf Coast, allowing it to trade both
OCI N.V.’s and third party products.
OCI N.V. is also the world’s largest distributor of
crystalline and granular ammonium sulphate (AS), with up to 1.75 million metric
tons from existing off-take agreements.

Management
and Board of Directors

OCI
N.V.’s Board of Directors comprises
independent non-executive chairman Michael Bennett, executive directors Nassef
Sawiris (Chief Executive Officer) and Salman Butt (Chief Financial Officer),
non-executive director Jérôme Guiraud, and independent non-executive directors
Kees van der Graaf, Sipko Schat, Jan Ter Wisch, and Robert Jan van de Kraats.

For
more information about OCI N.V.’s fertilizer and chemicals activities, please
visit www.oci.nl/oci-fg


About OCI N.V.

OCI
N.V. is a global producer of natural gas-based fertilizers based in the
Netherlands.  OCI N.V. produces nitrogen
fertilizers, methanol and other natural gas based chemical products, serving
agricultural and industrial customers from the Americas to Asia. We rank among
the world’s largest nitrogen fertilizer producers with current production
capacity of nearly 7 million metric tons in the Netherlands, the United States,
Egypt and Algeria. We are the largest global melamine producer and the largest
merchant methanol producer in the United States.

 

About Orascom
Construction

Orascom
Construction is a leading global engineering and construction contractor primarily
focused on infrastructure, industrial and high-end commercial projects in the
Middle East, North Africa, the United States, and the Pacific Rim for public
and private clients. It ranks among the world’s top global contractors with
projects and investments in more than 20 countries around the world. Orascom
Construction also develops and invests in infrastructure opportunities.

 

 


[1] Indicative
timeline, subject to change and regulatory approvals

[2] Excludes
BESIX and other equity-accounted for investees

This release includes additional documents. Select the link(s) below to view.

Demerger Announcement Final to Market.pdf

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The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.

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