Why is Naguib Sawiris heading to divide Orascom Investment Company? .. An expert answers

The shareholders of Orascom Investment Holding are awaiting the invitation of the extraordinary general assembly to approve the project to divide the company into two companies, one of which is for investment, which is the divisive company, and the other is Orascom Financial Holding, which is the split company, and the division of the assets, liabilities, property rights, expenses and revenues of the company at book value on December 31 last, With the same shareholders remaining in the company before the division, and the same number of shares, including GDRs, equivalent to 56.17% of the company’s shares, Dr. Mutasim Al-Shahidi, Vice Chairman of the Board of Directors of Horizon Securities Brokerage, answers the purpose of the division, as well as its impact on the shareholders.

Dr. Mutasim Al-Shahidi says that dividing the Orascom Investment Holding Company into a company specialized in monetary and non-banking financial activity, and another company specialized in telecommunications, will lead to, firstly, appointing a specialized department for each company, which improves its performance, and secondly, facilitating the sale and exit from one of the two sectors And the ease of marketing it to specialized parties.

Al-Shahidi adds, as for its impact on Orascom shareholders, there is no effect because every investor will hold a share in each company. However, if the management takes a decision on the exit or selling a unit, the investor will benefit from its return and its impact on business results.

And Orascom Investment Holding Company previously issued a disclosure project for the division of the company, and it set 6 justifications behind the amendment by dividing and reducing the capital, as follows:

1- The financial leverage that is unique to the financial services companies, due to the nature of their work, which may mislead investors and analysts when they evaluate the sharing company.

2- The interest of some investors in the financial services sector, which will give them a good opportunity to invest in the sectors they desire, or to exit from the unwanted sectors.

3- Providing many options for investors to invest, which may attract more investments from inside and outside the country, for the two divided and divided companies.

4- Providing more opportunities for the divided and divided company to grow and participate in new investments in its field.

5- Increasing the administration’s focus on the activities of each field to reach the highest levels of performance.

6- Improving the financial position of the divided and divided companies, through the distribution of assets and liabilities according to the field of activities of the subsidiaries of each company.

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