It has been apparent to us, that there is absolutely no rationale to justify the relationship between the fertiliser business [which exports to Europe, North America and Brazil] and the construction group which [specialises in infrastructure and] works predominantly in emerging markets … The combination was acting as an unnecessary poison pill.
OCI will be the world’s third largest manufacturer of nitrogen fertilizers, and the majority of its business is outside of Egypt. Clearly, a major impetus for this is to distance the fertilizer firm from the continued political instability in Egypt. What few numbers we’ve been able to find show a company trading under 7 times EBITDA. If the fertilizer firm is successful in decoupling its fortunes from Egypt, this will likely prove to be a most profitable opportunity for investors, but the task is easier said then done. It’s an intriguing possibility, but something we’re going to have to leave in the “too hard” pile. How about you?
Related articles
- Orascom Construction to spin off construction unit (marketwatch.com)
- Egypt’s OCI Q3 profit jumps on fertiliser boost (moroccotomorrow.org)
