Some big family businesses have been divesting or restructuring their shareholdings this week; easyJet founder Stelios Haji-Ioannou sold a “symbolic” stake in the airline, while Orascom Construction Industries secured the biggest investment into Egypt since the start of the Arab spring and is now preparing to float on the Dutch stock exchange.
In Europe, easyJet founder Stelios Haji-Ioannou and his brother and sister made a “token disposal of shares” – each selling 200,000 in the airline last week, taking the family's combined holding down to just below 37%.
Although the 200,000 shares only represented 0.34% of Haji-Ioannou’s personal holding, the move was a protest against easyJet board’s plans to add new aircraft to its fleet.
EasyJet announced plans in buy three new planes in October 2012, and it also added many new routes over the course of 2012. The airline also has further plans for expansion.
Haji-Ioannou, who was born into the shipping family that founded Troodos Shipping – one of the largest companies in the Mediterranean in its heyday, founded easyJet in 1995. However, he quit the board in 2010, believing the company’s rapid growth programme was undermining shareholder value for the sake of increased revenue.
In an open letter to shareholders on 21 January, he wrote: “If the board places another order for aircraft, it will destroy shareholder value into the future. If they place such an order now I will be looking to dispose of more of my stake before this happens.”
He finished: “I will be a loyal shareholder for the long term provided management doesn’t squander any more of our cash on new aircraft for at least the next four to five years.”
EasyJet declined to comment on the letter.
In Egypt, Orascom Construction Industries – controlled by the Sawiris family – announced on 18 January it had raised $2 billion (€1.5 billion) from international investors. Half of this sum comes from Cascade Investments, which is owned by a trio of US investors – Bill Gates, Southeastern Asset Management and Davis Selected Advisers.
OCI will use the cash to restructure itself financially, moving all its shareholders’ holdings into its Amsterdam-based fertiliser and investment subsidiary OCI NV. Under the plans, the group will move its listing in Egypt to Amsterdam, where it will trade on the Euronext stock exchange. OCI NV will offer to acquire all of the global depositary receipts in the overall OCI group sold through international bank branches. They will also issue a mandatory tender to acquire all of the ordinary shares in OCI Group that are traded on the Egyptian stock exchange, EGX.
The GDRs and shares will be exchanged for shares in OCI NV, or bought back at $43 per share. The $2 billion investment will be used to fund the share buyback and to further the company's growth strategy. The Sawiris family’s holding will remain at its current level of 60% following the restructure.
In a statement, OCI said the move “will allow the company deeper access to capital markets”, but commentators have speculated that OCI Group made the move due to the falling levels of foreign direct investment in Egypt following recent political upheaval. A spokesperson for the group told CampdenFB: “OCI NV intends to maintain its presence on the EGX, either through the current listing if liquidity thresholds are met, or through an Egyptian depository receipts programme.”
Second-gen Nassef Sawiris, chief executive of OCI Group, added in the statement: OCI's existing Egyptian operational headquarters, assets and 45,000 Egyptian employees comprising half of the group's global employee base stand to benefit from our expanded access to capital. We expect our new profile to positively impact the group's ability to expand into Egypt and pursue its growth strategy."