OCI lines up sale of 50% stake in Dubai tram builder

Construction work on the Dubai tram system. Razan Alzayani / The National

OCI, the Amsterdam-listed group headed by the Egyptian billionaire Nassef Sawiris, plans to sell its 50 per cent stake in builder Besix, the company building the Dubai Tram.

OCI which last year acquired 97.44 per cent of the shares in Orascom Construction Industries following the Egyptian revolution, wants to sell its stake in Belgium’s biggest builder as part of its strategy to strengthen its wholly owned businesses and to focus on core markets, the company said in a statement posted to the Dutch bourse.

“We will continue to assess and selectively pursue acquisitions and disposals to further strengthen our construction business,” said the OCI chief executive Mr Sawiris.

“In line with this strategy we are considering to divest our 50 per cent stake in Besix Group which we jointly acquired with its management in a leveraged buyout in 2004. Discussions with interested parties have been initiated which may lead to the sale of our 50 per cent stake,” he added.

Founded in 1909, Besix has been involved in the construction of Burj Khalifa and is currently building the Dubai Tram. It employs 18,000 staff in 17 countries on four different continents.

The news comes just days after the Arabtec chief executive Hasan Ismaik told The National at Cityscape that the aggressively expanding UAE-based construction company was in discussions to acquire a large European contractor.

“All options are on the table to pay for this contractor,” Mr Ismaik said at the time. “We may issue bonds, we may take out loans.”

Arabtec senior executives were unavailable to comment on whether Arabtec was one of the companies bidding for Besix.

Arabtec is rapidly expanding its global presence through acquisitions and alliances.

This has included partnerships with Samsung Engineering and GS Engineering & Construction of South Korea, an increase in the company’s stake in Target Engineering and the acquisition of an extra 45 per cent stake in the electromechanical specialist Efeco. In February the company denied rumours that it was on the verge of acquiring the Kuwaiti construction firm Kharafi National.

“Based on the implied expansion of the backlog from awards already announced and the potential for additional contract awards which an expanded Arabtec with a coalition of partners could secure, acquisitions by the company look like they may be needed to help complete the contracts and boost returns to shareholders,” said Sanyalak Manibhandu, a senior analyst at NBAD Securities.

The announcement came as OCI reported full-year profits of US$295.2 million in 2013 compared with a $1.89 billion loss the previous year.

Shares in OCI rose 3.34 per cent to €31.43. Shares in Arabtec rose 0.78 per cent to Dh9.00.

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