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Tuesday, 7 December 2021

OC announces dividend payout + acquisition in the cards

Orascom Construction’s (OC) board of directors has approved an interim dividend payout of USD 0.2313 per share, the company said in an EGX filing (pdf) yesterday. Investors holding shares listed on the Nasdaq Dubai will receive the payment in USD, while those holding shares on the EGX will receive the payment in the EGP equivalent.

This marks the company's fifth dividend payment to shareholders since 2018. The payout will be distributed on 31 January, bringing the dual-listed company’s total dividends in FY 2021 to USD 0.4626 per share.

IN OTHER NEWS FROM OC- The company is planning to acquire an equipment distribution and services business owned by the Sawiris family for USD 35 mn in an all-cash transaction, according to a statement (pdf) yesterday. OC announced in October that it was looking at acquiring up to 100% (pdf) of the company, and appointed HLB for Financial Consultancies on Securities to conduct a fair value study.

The business: The target company owns three separate businesses active in equipment import, distribution and maintenance: Orascom Trading, Orascom Freezone and National Equipment Company. The company is the sole agent for more than 45 original equipment manufacturers in Egypt, including Grove, John Deere, Volvo Penta, Hitachi, and Mitsubishi Heavy Industries. It is owned by the Sawiris family but is legally separate from OC.

The next steps: Shareholders who will be asked to approve the transaction at an extraordinary general meeting on 27 December. Shareholders who are members of the Sawiris family will abstain from voting, as will two board members.

The news comes as the company has reported solid earnings growth in 2021: OC last month reported (pdf) net income of USD 76.1 mn during the first nine months of the year, up 17% from 2020, as well as a pick-up in backlog and new awards, which were boosted by the contract for the construction of Egypt’s first high-speed rail system. The latest payout means OC will distribute USD 51.5 mn in dividends this year.

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