* Firm says Egyptian delisting question remains unsettled
* OCI denies it is turning its back on Egypt
* Needs international capital to fund expansion
* Regulator only 'protecting' shareholders
(Adds quotes from OCI, financial authority chief, analyst)
By Tom Perry and Asma Alsharif
CAIRO, Feb 20 A deal that would see Bill Gates
and other U.S. investors inject $1 billion in fertilizer and
construction firm OCI NV has been hampered by Egyptian
regulators' request for clarification of the deal.
The Egyptian Financial Supervisory Authority (EFSA) wanted
more information on an offer by Dutch-listed OCI NV to acquire
ordinary shares of its Egyptian-listed subsidiary Orascom
Construction Industries, OCI NV said.
This move will delay completion of a deal under which U.S.
investors will pay shareholders who choose to sell their
ordinary, Egypt-listed shares, said Mohsen Adel, vice chairman
and managing director of Pioneer Funds, a financial institution.
"The new disclosures will not affect the course of the deal
but will extend the time," he said.
The transaction may see one of Egypt's biggest firms
disappearing from the local stock exchange.
Dutch-listed OCI NV announced the deal in January, under
which holders of OCI's global depository receipts were offered
shares in OCI NV, while holders of the firm's Egypt-listed
ordinary shares got the option of cash or OCI NV shares.
Omar Darwazah, head of investor relations for the Egyptian
company said the question of a delisting had yet to be settled.
"It is not yet clear," he told Reuters, noting that shareholders
also had the option to reject both the cash offer and the share
swap. Under Egyptian law, companies must have a free float of at
least five percent of their capital on the stock market.
Darwazah denied OCI was turning its back on the country.
"This does not mean that OCI is exiting Egypt. The stock
exchange doesn't change the fact that we have billions of
dollars invested in Egypt," he said.
OCI wanted to improve its ability to fund global expansion
with international capital, he said, noting that obtaining
financing in Egypt has become very difficult.
The country is beset by economic and political uncertainty
and Moody's agency cut the credit ratings of five Egyptian banks
OCI said on Feb. 13 that shareholders had approved the offer
at meetings in Cairo. However, OCI NV said the Egyptian-listed
OCI SAE would need another extraordinary general meeting due to
the regulator's request.
OCI SAE would comply with the request for "additional
documentation, disclosures and clarification" on the tender
offer for the Egyptian-listed shares, the Dutch parent said in a
The extraordinary general meeting would discuss additional
disclosures related to the transaction "and to subsequently
obtain approval on the (meeting's) ... resolutions from minority
shareholder", the statement said.
Once minority shareholders had approved these resolutions,
the result of the meeting would be ratified and an updated
mandatory tender offer application would be formally filed with
the Egyptian authorities, it said.
EFSA head Ashraf El Sharkawy told Reuters the clarifications
had been requested "to guarantee the stability of the
non-banking financial markets". He added that the aim was not to
obstruct or delay the deal but to protect shareholders.
In a statement, the authority added that it had sought the
extra clarifications because of "the omission of many of the
statements needed to be disclosed" and cited what it described
as "proof of incomplete and incorrect incidents" at the last
ordinary and extraordinary meetings.
OCI NV said in January it had obtained commitments in excess
of $2 billion from participating investors to pay shareholders
who choose to sell their OCI ordinary shares for cash.
This included $1 billion from U.S. investors, comprising
Cascade Investment LCC - which is wholly owned by Microsoft
chief Bill Gates - as well as Southeastern Asset Management and
Davis Selected Advisers.
OCI Chief Executive Nassef Sawiris said on Jan. 25 he
expected Gates and the other U.S. investors to own up to 12
percent of the company.
(Reporting by Ehab Farouk, Asma Alsharif and Tom Perry; Writing
by Tom Perry; Editing by David Stamp)