Egypt's OCI lifts bourse after settling tax dispute
Egypt's large-cap Orascom Construction Industries rises after the conglomerate agreed to pay $1 billion in taxes, settling a long dispute with the authorities.
Shares in OCI gain 2.9 percent. The settlement with the Egyptian Tax Authority should pave the way for OCI to go ahead with a plan for its Dutch-listed parent company to publicly tender for OCI shares listed on the Egyptian stock exchange, OCI said.
"We upgrade our recommendation on OCI from 'hold' to 'buy' after the agreement with the Egyptian Tax Authority has been officially finalised, which paves the way for the launch of the mandatory tender offer by OCI N.V.," Pharos Holding says in a note.
OCI is the biggest stock in Cairo so it helps lift the whole market; the main index rises 0.8 percent to 5,235 points.
If the tender offer goes ahead, it will be seen as a sign that Egyptian authorities are willing to be positive in regulating the market. They had previoulsy expressed doubts about the tender because it could lead to the delisting of OCI.
There was also a sign this week that authorities remain willing to intervene in the market for political reasons; EFG Hermes said on Wednesday it has been forced to cancel its planned tie-up with Qatar's QInvest.
Egyptian regulators failed to approve the deal by the deadline; the tie-up was politically sensitive because both of EFG's co-chief executives, Hassan Heikal and Yasser El Mallawany, are on trial, along with the two sons of ousted President Hosni Mubarak, over allegations of illegal share dealings in relation to a 2007 transaction.
Reuters
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