Egypt's OCI shareholders approve company split

Ahram Online and Reuters, Thursday 17 May 2012

Egypt exchange eying another split by one of its heavyweight companies, move awaiting regulator approval

(Photo: Reuters)

Shareholders in Orascom Construction Industries (OCI) have approved a plan to separate its construction and fertiliser businesses into two new companies, the group said on Thursday.

The move is designed to make the two entities more competitive, widen their investor base, make their management more flexible and improve their profiles.

Each stockholder should receive an additional share for each share held.

Usually companies go for stock splits when a company's share price has grown so high to many investors and too expensive to buy in round lots.

"OCI reported a record shareholder participation rate of 84.48 per cent of the company's total outstanding shares at the extraordinary general meeting," it said in a statement.

Egypt's regulator must approve the move before it can go ahead. 

OCI closed  up 1 per cent at LE273.7 on Thursday. It has the highest amount of capital on the Egyptian stock market and is owned by Naguib Sawiris.

In early 2012, the Egyptian telecommunications giant Orascom Telecom, which is partially owned by Naguib Sawiris, was split following its partial sale to Russia's Vimpelcom the previous year.

The spun-off assets now form Orascom Telecom Holding (OTH), mainly comprised of overseas interests and owned by Vimpelcom, and Orascom Telecom Media and Technology (OTMT).

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