OCI Global’s biggest shareholder, Egyptian billionaire Nassef Sawiris, is reported to be considering a radical overhaul of his chemicals and fertilizers empire that could include breaking up his main holding – Dutch-listed OCI Global – and offloading its parts.
Sawiris, who holds a 38.71% stake in OCI and his family a further 14.22% interest as of Oct. 23, 2023, said in an interview this week with the UK’s Financial Times that options for OCI include selling off all assets and turning it into a cash shell for acquisitions in new industries.
“We are evaluating what we want to do, not just with the money [from the asset sales] but as a team,” he told the newspaper. “And maybe OCI stays with a piece or two pieces and it becomes a cash cow, and becomes a machine for further investment. We’re quite open-minded. It doesn’t have to be fertilizer, doesn’t have to be chemicals.”
OCI in December announced binding agreements for the sale of two of its key businesses – Wever, Iowa-based Iowa Fertilizer Co. LLC (IFCo) (GM Dec. 22, 2023) and its 50% + 1 share stake in ADX-listed Fertiglobe (GM Dec. 15, 2023). The two sales are expected to bring in gross proceeds of $7.22 billion.
The sales agreements followed a strategic review by the company of all its business lines, as well as a listing review in the Netherlands after US activist investor Jeff Ubben, who owns a 5% stake in OCI, urged the company to explore options, including asset sales to improve shareholder returns.
Responding to analyst questions for comment on the Financial Times interview, OCI CFO Hassan Badrawi said in a company earnings call on Feb. 14 that it was “in OCI’s DNA to look at value maximization” and to look at opportunities that unlock value for shareholders.
“What is ascribed to Nassef in the Financial Times piece is fairly consistent with everything that we have done in the past and everything we are saying today as part of the strategic review that’s been ongoing by OCI,” Badrawi said.
OCI confirmed in its earnings statements this week that following the two announced divestments, it has received “considerable inbound inquiry and interest in its remaining business,” and the company has decided in Board discussions to reopen the strategic review.
OCI CEO Ahmed El-Hoshy told analysts that OCI is exploring further value-creative strategic options across the portfolio, including the previously announced equity participation in its Texas Blue Ammonia project. “All options are on the table,” he said.
Following the announced sales transactions, OCI’s business is now focused on just two industrial sites: OCI Nitrogen in Geleen and the Texas Beaumont complex, which is also the location of the company’s Texas Blue Ammonia project with capacity of 1.1 million mt/y. The plant remains on track for commissioning in early 2025.