The initiative has not entailed any increase in capital. ‘Having the possibility of buying GDRs will make it easier for US and other foreign investors to buy OCI without having to worry about the foreign exchange risk associated with buying the shares in Egypt,’ says one London-based analyst. The GDRs, each representing two OCI shares, are fungible, meaning that they can be converted into Egypt-listed stock at a later date.

The authorised adviser for the GDR launch was Merrill Lynch, which, along with HSBC, has agreed to act as a market maker. OCI is also understood to have pledged to convert some of its treasury stock to GDRs.

The company is one of the largest traded on the Egyptian stock exchange, and it has managed to achieve consistent increases in turnover and profits over the past few years, while reducing its dependence on the Egyptian market. It has built up a powerful cement subsidiary in Egypt, with the capacity to produce 7 million tonnes a year (t/y), and is investing in a 2 million-t/y cement project in Algeria. OCI has also succeeded in winning some large construction contracts in Qatar.

Analysts have welcomed moves to streamline the company’s debts, notably through a planned £E 1,000 million ($220 million) bond issue by its affiliate, Egyptian Cement Company(MEED 16:8:02, Banking & Finance).

OCI on 27 August announced a strategic alliance between its 50 per cent-owned subsidiary United Paints & Chemicals and India’s Asian Paints.

OCI shares closed on 4 September at just over £E 27 ($6). The company has 60 million shares.