OCI N.V. (OIC.F) Q3 FY2025 Earnings Call Transcript & Summary

Hello, and welcome, everyone, to the OCI Global Strategic Combination Analyst and Investor Call. My name is Becky and I will be your operator today. [Operator Instructions] I will now hand over to your host, Sarah Rajani, OCI Vice President, Investor Relations and Communications, to begin. Please go ahead.

Thank you. Good afternoon, and good morning to our audience in the Americas. Thank you for attending the call today. With me is Hassan Badrawi, our Chief Executive Officer; and Beshoy Guirguis, our Chief Financial Officer; who will provide a brief overview of our proposed strategic combination with Orascom Construction announced earlier this week. We will then turn to Q&A. The press release and the investor presentation are available on our website at oci-global.com. We will be referring to slides in the investor presentation during this call. I would like to remind you that any forward-looking statements made on this call involve risks and the actual results could differ materially from those statements. Let me hand it over to Hassan.

Thank you, Sarah, and thank you all for joining us today. As announced on 22nd of September, earlier this year, OCI has been pursuing a potential combination with Orascom Construction with a view to establishing a scalable infrastructure investment platform anchored in Abu Dhabi with global reach. Following an extensive process, including the assessment of strategic merits, the conduct of mutual due diligence and negotiations led by an independent transaction committee at OCI, the company has reached an agreement, which was announced to the market earlier this week. The combination, which was unanimously approved and recommended to shareholders by the independent Boards of both companies results in OCI receiving 47% of the fully diluted outstanding shares of Orascom Construction for distribution to its shareholders. We note that [ NNS ] was not involved in this process. As OCI approaches the conclusion of the strategic review, this combination has emerged as the most attractive way forward and is a natural pivot point for the next evolution in OCI's value creation journey. We have continued to evaluate our strategy holistically and not in individual iterations. From the outset, the company has spent significant time and resources exploring the various avenues in the strategic review, including the sale of the business as a whole. Due to the lack of traction on our holistic solution, we took the more challenging and compelling route of selling assets in a series of complex transactions with strategics to maximize asset valuation in this process. These sales were executed on a tax-efficient basis alongside the extraordinary distributions to shareholders, which have culminated a $7 billion of -- distributed in the last -- over the last 4 years, predominantly largely also on a tax-efficient basis. A liquidation scenario was further evaluated in which the Board and its independent advisers consider the distributions that could be made available to shareholders based on best estimates of asset realization values and liabilities, alongside the ongoing costs that would need to be maintained over this period. This acquisition analysis showed a materially lower value than what is being presented in the context of the combination today, notwithstanding, of course, the impact of reduced size and liquidity over time. As such, we believe the proposed combination preserves the value of the residual assets provides an optimal environment for the management of continuing liabilities and contractual obligations. Leverages the integrated platform skills and knowledge base and the value-accretive future and avoid significant restructuring and other [indiscernible] costs that would be associated with an alternative and lengthy wind-down process. The agreed exchange ratio preserves upside for OCI shareholders while giving them participation in the combined entity's future growth, not considering the future potential returns associated with capital deployment, available leverage and administrative synergies that form the fundamental rationale for this combination. Turning to governance. In this process, given the related party components of this transaction, where the largest shareholder, NNS owns approximately the same equity in both companies, NNS was completely [ recused ] from both process -- from those processes. To further ensure independence of decision-making and conflict of interest management and the appropriate safeguarding of minority shareholder interest, a transaction committee comprised subset of OCI's independent, nonexecutive directors was established to ensure that the relevant governance protocols were adhered to and followed. The independent directors appointed Rothschild & Co as financial adviser to perform an independent valuation in respect of the consideration of Orascom Construction shares and to provide a fairness opinion on the exchange ratio whilst the Brauw Blackstone Westbroek N.V. provided -- the law firm provided the independent directors with independent legal counsel. The OCI Board evaluated the fairness of the proposed combination and assessed it against the company -- sorry, against the aforementioned liquidation of OCI status quo with the support of the independent advisers. The company also retained advisory services of Rabobank, A&O Shearman, ABN AMRO and Deloitte. Legal and financial due diligence were also conducted to identify any material issues that may have warranted consideration by the Board and within the fairness opinion. Turning now to a little bit to the presentation, which will include some additional information further to the publication of the EGM materials this morning, including key transaction highlights as well as disclosure of the governance framework. I will now make a few points in this regard. Start maybe looking at Slides 4 and 5. The envisaged combined entity to be rebranded as Orascom upon closing aims to establish, as I mentioned earlier, a new infrastructure and investment platform headquartered at Abu Dhabi and listed at Abu Dhabi with the international reach. It brings together Orascom's engineering, procurement and construction expertise and a complementary growing concessions portfolio with OCI's institutional investment capabilities, transactional expertise and record of capital allocation and relationships, aligning complementary strengths to pursue a larger and more diversified opportunity set in our new focus area of infrastructure. This integrated platform will target recurring sustainable income and attractive long-term returns and will be organized across 3 strategic pillars, which includes Orascom infrastructure, Orascom Construction encapsulating the EPC business and Orascom Capital. By combining the financial resources, the platform is expected to have a stronger balance sheet and enhanced capacity to raise capital for investment in scalable, resilient infrastructure assets. This will allow the combination to invest at scale both directly and indirectly through partnership-based models and opportunities that could span equity and credit and operations and maintenance in the future. Turning to Slide 6. This highlights OCI's track record of building scaling and in certain circumstances exiting business successfully to maximize shareholder returns since the original listing of OCI in his predecessor form on the Egyptian Stock Exchange in 1999. The next slide, 7 and 8, together with the information in the appendices describe the relevant history of both companies, including Orascom Construction capabilities that will provide the platform with the execution. So we'll provide the platform with the execution capabilities for the combination, new plan as well as an overview of the company's experience in critical infrastructure growth markets and industrial sectors like power, water, transportation, and data centers with a track record encompassing some of the largest projects in the world, spanning 5 continents. Looking at Slide 9. This provides a snapshot of the infrastructure landscape and some of the key mega trends that we believe the combination is strategically positioned to benefit from leveraging its integrated capabilities to pursue a larger and more diversified opportunity set in that space. Lastly, on Slides 11 to 13, we provide an overview of the key transaction highlights and governance and regulatory framework surrounding this combination as well as the transaction structure pre and post combination. A few key points to highlight in this regard. OCI and Orascom Construction will combine their businesses through a sale and purchase share swap mechanism, subject to shareholder approval at EGMs for both companies that are scheduled for the 22nd of January 2026. As I mentioned earlier, the transaction has been recommended and supported by both boards and is subject to customary conditions, including obtaining relevant regulatory clearances. The combination will be domiciled in the UAE and listed in the Abu Dhabi Securities Exchange with a secondary listing in Egypt. The combination should result in OCI receiving 47% of the fully diluted outstanding shares of Orascom Construction for distribution to the shareholders. This is on the basis of an exchange ratio determined with reference to the equity value of each of OCI and Orascom Construction. This is an all-stock transaction with no cash distributions. A future dividend policy will be evaluated by the new Orascom Board and communicated to shareholders in due course at around closing. Following Board approvals from both companies, whereby conflicted Board members did not vote, the combination will only proceed subject to the shareholder approval from OCI with the Sawiris family expected to vote in favor of the combination and shareholder approval from Orascom Construction, excluding related parties as legally required with voting thresholds to follow all applicable listing rules law and corporate governance regulations, ensuring a fair and transparent approval process. Finally, the composition of the Combination's Board and its executive leadership team will be announced prior to the completion of the combination Mr. Nassef Sawiris will serve as Non-Executive Chairman of the combined entity. In closing my remarks, I would like to reiterate our strong belief that this proposed combination offers OCI shareholders the optimal pathway to create value in the future while leveraging our complementary strengths and track record that we have demonstrated over the past 2.5 decades as a listed company. I wish to extend my thanks to the OCI team for their hard work and dedication, especially these last few years, during which we have differentiated ourselves through the successful execution of complex transactions with multiple strategics across various jurisdictions, securing robust valuations and having returned significant returns to our shareholders in a tax-efficient manner. We have remained true to our ethos of being strategically agile and swift in decision-making, reacting to market conditions and bolstering our multi-decade track record of building complex platforms with successful exits. Lastly, we appreciate the support of our various stakeholders on this journey. We started really more than 70 years ago with the inception of the company and 2.5 decades ago as a listed company and since 2013 as a Dutch listed company. And with that, we conclude our prepared remarks and would like to open the line for questions. Thank you.

[Operator Instructions] Our first question comes from Christian Faitz from Kepler Cheuvreu.

Two questions, please. First of all, can you give us an idea of your net cash position of OCI for year-end? And the second question is, you seem to be pretty certain that the closing of the deal will be done in the first half of Q1 next year. Can you remind us of the key regulatory approvals you need to close the deal?

Thanks, Christian. In regards to your first question, we've shared, I believe, in the trading reports that as of the date of the trading, we report our net debt position was around $59 million. Obviously, that number continues to move as the months progress due to the CapEx associated with the clean ammonia project in the U.S. and ongoing Holdco and listing costs. So that number will continue to increase in the coming months. In respect to the regulatory question -- to the regulatory approvals, I believe, the EGM is scheduled on the 22nd of January. We do not believe that there is any impediment from a regulatory standpoint in terms of approval that would -- that will be required post the EGM.

Our next question comes from Sriharsha Pappu from HSBC.

Could you just walk us through how the Board thinks about the value offered in the deal to OCI minorities versus where the stock was trading pre-merger announcement? And the reason I ask is optically effectively, this looks like Orascom is doing a capital raise at a 30% premium that OCI minorities have no choice but to participate in.

Yes, obviously, the board approached a transaction with the support of independent advisers and because -- by conducting evaluation process, which I think was summarized in the fairness opinion in that part of the EGM circular, which entails -- given the nature of the residual business was very much focused on also some of the parts approach, where the individual pieces both on assets and liabilities basis were closely apprised resulting in the fair value that was used, the input value that was negotiated and used of around $1.35 billion. And the evaluation was done against or compared to a liquidation scenario, as I mentioned in my earlier remarks. And then acquisition scenario was actually was part of the due diligence in the sense that quite a deep analysis was performed to evaluate the -- what really is the only viable alternative in this situation to assess what are the available -- what would be the available distribution in such a scenario? And what kind of -- type of time line? How do we deal with ongoing contractual obligations and liabilities both in the form of specific indemnities and contingent liabilities that have arisen from -- as part of the complex set of contracts we've signed over the last 2 years to unlock the valuation that we were able to achieve and to -- that resulted in these distributions. And all that complex of contractual obligations, which will continue going forward alongside residual operating cash flows, ongoing listing costs, wind-down costs were evaluated as part of the liquidation. And the analysis showed us and which was independently validated and analyze that it is a significantly or materially worse outcome than what is being contemplated here in terms of the preservation of this combination of assets and liabilities in its current form and transferred at fair value. I hope that answers your question.

Yes, it does. If I could ask a follow-up. As part of this process, was there ever a tax-free structure for minority is contemplated because the -- obviously, there's a significant withholding tax now that minorities have to incur.

Yes. I mean we've looked at a lot of available options, all available options, but this is really was the only one that's commercially viable to achieve the objective of redeployment of capital, which we had mentioned as far back as late 2024, although we had -- since then, we went a little bit further in the distribution that [ we affected ] compared to what we intended to redeploy. If you recall, we were talking initially about multiple billions of potential redeployments. But yes, and again, and also taking a step back, we -- and I mentioned that in the -- a specific point in my earlier remarks, Obviously, had we done a holistic or a full exit of the business at some point? I think it would have been an easier situation, but may not have realized the valuations that we were able to achieve by pursuing these individual as a series of transactions, which obviously took significant more time,, created maybe more larger set of contingent liabilities that we have to deal with and different contracts that we have to manage that survived the closing. And I think our history demonstrates that there were attempts to do transactions that involve the whole company in a much more simplified way. But I think what we were able to achieve through this route speaks for itself in terms of the valuations that were achieved, the size of the distributions that were made and the fact that they were all, almost over 95% of tax efficient in terms of the distributions and the transactions themselves will also almost entirely tax-free due to the diligent approach and structuring that we have done over the years and how we approach these investments.

Our next question comes from Mark Adeeb from CI Capital.

I just have 2 questions from my end, if I may. The first one is what does OCI bring to the combined entity balance sheet, given that now the company has a net debt position, and it was mentioned in the press release that there will be a stronger balance sheet going forward for the new entity? And my second question the $1.3 billion valuation. I'm under the impression that this was as of second quarter 2025, which included a net cash balance of $1 billion. So how did this -- like changed since then.

Yes. I'll start with your second question. All inflows and outflows post that date were taken into consideration in the fairness opinions that are conducted by both Rothschild and BDO, which obviously provided the transaction zone that was used to negotiate the final input valuations between the transaction committee and counterparts. And that resulted in the proposed exchange ratio and relative valuations. In terms of your first question, I think it's more of a -- it's not a short-term, more of a longer medium-term reality that the combined cash generation from OC and the expected monetizations from OCI eventually will provide the platform with the funding needed later in the year 2026 to be able to deploy and create -- deploy the capital and create the platform that we are talking about here. So yesterday, we are in a net debt position, but there are expected future inflows that obviously come with some risks but also are -- have largely been quantified and reflected in the valuation that you see today that will be contributing to the balance sheet of the combined entity in the future. That's on the quantitative side. Obviously, on the qualitative side, we've covered this in the previous material and also in the material we've circulated today, in terms of reuniting 2 platforms that really have over the last -- until the separation in 2015, really housed some of the highest return [ years ] or highest return endeavors that have been achieved in terms of building the various platforms over the years, combining execution expertise with the sort of investment institutional knowledge and capacity with financing capability and strong relationships that we have with financing institutions. And I think we mentioned somewhere that sort of between the 2 companies, the total value of projects, financings, M&A conducted over this last 24, 25 years, it's close to $90 billion worth of experience, which is brought to bear in what -- in this drive to build another or a new platform, which we hope to scale up and be growth focused and continue our legacy of generating returns to our shareholders.

Okay. Just to make sure I got this correctly. So the IFA report took into account the current net debt position, not the net cash position of second quarter, right?

Yes. I mean it's taken to -- it took all facts, including all latest estimates and inflows and outflows current and expected in the reports.

Okay. And in terms of the assets that are going to generate cash flow, so which assets on OCI side that are going to generate these future cash flows?

Yes. I mean it's the components that remain in OCI, which includes the OCIN platform or operating assets. We have the Methanex stake that was part of the methanol exit. There are future proceeds from the sale of the terminal. Should it close -- assuming it closes successfully in the first half of the year, plus you have the net outcome of the receivable of clean ammonia, I'd say netted against the CapEx -- the capital to complete the project. I mean, that's basically the combination of the assets that exist in addition to, of course, you have some incremental holding company costs that will continue to be incurred, which will be further evaluated as part of the integration.

Our next question comes from Eric Vanden Hudding from VEB. Please go ahead.

Yes, thank you for clarifying the reasons why not choosing a cash offer. As you are aware, European Investors, VEB represents a lot of retail investors, particularly in the Netherlands, but also broader. I'm sure you're aware that a lot of these retail investors don't have access to the Abu Dhabi Stock Exchange. So I was wondering why the Board has chosen to sort of force these investors into illiquid shares that they probably can't hold any longer. So why haven't you chosen to do a dual listing, for example, of Orascom in Amsterdam? That's my first question. And then my second question is, you've already stated the potential conflict of interest in terms of not being able to vote at the Board level. My question is, do you think it's appropriate and even permissible in the Dutch law -- Dutch corporate law for the majority shareholder to vote at the EGM. Thank you.

Yes. Thank you for your questions. Let me ask out to the last question. For sure, all applicable laws were closely followed in this process -- in this fiduciary process. So we have -- we're quite clear and confident about the application of all relevant Dutch laws and Dutch code in this respect. It is -- and the Board was supported in that endeavor by two law firms, one independently retained by the independent directors in order to continuously scrutinize these aspects of the transaction, of the proposed transaction and one was retained by the company as well to support all the due diligence and legal work to ensure quality control of all documentation, et cetera. So that's in response to your second question. In response to your first question, we've -- we're -- we acknowledge that there will be difficulties associated with holding AGX listed stock for some investors and some shareholders. And as such, we have really sought to ensure some good mechanisms are put in place to address this for the shareholders that wish to avail for themselves the ability to do so. These arrangements include voluntary sale facilities for those investors whose individual banks or brokers are not willing to or unable -- not willing more so than unable to hold the Orascom shares, and the -- which will be organized through our Dutch agent, ABN AMRO has also been retained to support in this process. For those investors who do not wish to open an ADX account directly or choose not to sell their OCI shares. We've also -- these years will be -- we set up a situation where the shares will be booked in a suspense account for an interim period, which will give the investors sufficient time to organize their affairs and not be forced or not be into a force-selling situation if they are unwilling to hold these shares. And instructions on how to open an account directly as well as arrangements we have put in place for those who do not wish to or cannot take the delivery of the shares, have been published this morning in the EGM circular, which is available on the company website. And we really urge shareholders to consult their own banks or brokers because ABN has also reached out to all custodians to make sure that all this information is easily retrievable and available, and they're also avail themselves to answer questions and support the process. Effectively, ABN will act as a help desk, facilitate this process for a period of up to 3 years. So I think we've gone beyond the call of duty in this respect, and I believe the Board has also appreciated the task and the process that has been set up in this regard in order to ensure that everybody has ample time to make informed decisions and not be forced into any situation.

Yes. Thank you, Hassan. Can I do 1 follow-up? I'm sure you've seen the sort of forced selling in the shares of OCI over the last couple of days. I was wondering if you -- how much comfort do you have that those arrangements that you've made that those will stop this from escalating further.

No. I mean there is -- we can see there has been a little bit of an uptick in volume. I'm -- we don't really want to comment on movements that we don't have visibility on, but I would expect that there could be some short-term volatility associated maybe with some passive sell down by entities that choose just not to engage in this -- in the mechanisms that we have provided with great care. But it's something to -- that we are monitoring going forward.

Our next question comes from Tobias Rolle from Twenty Nine Investment.

I have a couple of questions. But first of all, I'd like to answer or get an answer on the question on the EGM, which you planned. In the appendix...

I can barely hear, it's barely audible. Can you [indiscernible] again?

Is it better now?

Yes, slightly better. Okay.

Yes. Okay. So I have a question on the shareholder meeting invitation where you mentioned on Page 22 that shareholders right to table general meeting resolutions, shareholders holding 3% of the issued and outstanding share capital may request agenda items is submitted at least 60 days before the meeting. We will not be able to do that. Can you please comment.

I think you're referring to the comparison that we have provided between the 2 companies' rights, but I don't think it has to do with the way the process works in the Netherlands. I think we've -- we wanted to provide a little bit of visibility on -- in the new company, what do the existing governance framework provides for shareholders under the new -- in the ADX context versus what they have today. It's just a comparison that was provided. I'm not sure if that's correct.

You're not offering that shareholders with larger holdings 3% can put anything on the EGM because you're [indiscernible].

In respect to our Dutch process -- yes, in respect to the Dutch process, I think we will follow the letter of the codes. But I'm not sure what the question is. But please feel free to...

The question is, whether the 60 days will not be -- it is like too short, right? We have 40 over days until the EGM is happening. So nobody can place any extraordinary item on the EGM anymore? So I don't think the EGM in this respect is going to be valid because none can place an item on the EGM invitation. So we cannot vote on our own suggestions. We have to vote on your agenda, and that's not -- that should not be the case, to be honest. okay? So something to think about for the company. So I'd like to proceed with some questions, please, okay? So why did the Board chose the liquidation style -- sorry?

Thank you for your comment on that. We'll take note of that.

Okay. Thank you. So first question, why did the Board choose liquidation style valuation based on asset disposal and wind-down outcomes instead of using transparent market-based metrics such as 1 month or at least the 3 months VWAP for both OCI and Orascom shares, especially since VWAP is a widely accepted method in exchange ratios and would result in a more balanced outcome for minority shareholders. Question number two, can the Board explain how selecting a liquidation scenario valuation, which structurally lowers OCI's implied value complies with Article 2.8, given the alternative objective methods like VWAP, NAV to NAV comparison or pure multiple benchmarking would have yielded a materially higher exchange ratio.

I think maybe there's bit of understanding that the liquidation was used as a basis of the valuation, it was not. The [ valuation ] of the valuation was a fair valuation that was done on market-based methodology for all the individual assets and liabilities, including relevant multiples in the case of the existing operating business and evaluating the actual expected cash flows on a DCF basis for the for any expected proceeds. That's how we culminated in the $1.35 billion valuation that was used, which was significantly above the market value whether at any point in time in the recent history. So that's exactly that was used as the methodology input for the valuation. On the other side, the input valuation was also based on what is provided for by the regulatory framework in these jurisdictions, which necessitates also a fair value approach. And again, there, it was -- typical methodology is used, which is a culmination of various methodologies blended together to come out at a value. That generated ranges within these ranges, both mandates were then given the remit to negotiate a situation, and we were able to reach at the exchange ratio, which really provides OCI assets and labilities with the -- I think what is a very fair value for the current residual assets under abilities complex that we have. But the liquidation was only evaluated in [ juxtaposition ] as an alternative to what is being contemplated in terms of the value -- implies the underlying value of the assets being imported into this combination. But it was not a valuation basis for the number that you see.

Do you have the NAV comparison with the detailed numbers [indiscernible].

And just to be helpful, Page 6 and 7 of the circular lay out in full the full valuation methodology and appraisal I urge you to look at those as well. And if you have any questions after the call in regard to the circular and the fairness opinion, we're happy to answer.

Okay. Okay. I have 1 more question for...

Which also includes the VWAP, by the way, yes. So that's also been taken into consideration.

Okay. I will have a look. Thank you so much. Why did OCI choose a demerger, sale and distribution liquidation sequence rather than a straightforward status cross merger for the merger, which was to have granted shareholders withdrawl all right. What was the avoidance of minority share protections an intentional part?

Yes, as I mentioned earlier, we've assessed the feasibility of other structures, but the only commercially viable one and available in this combination context, was the structure which otherwise, the underlying thesis of having a reasonable capital base to deploy in the context of building a new platform, basically disappears in any other structure. And like I mentioned, we don't look at this situation in isolation. This is not a moment in time that we're looking at this particular moment in time. This is the culmination of a strategic review where all decisions are really connected to each other. And we look at it as a holistic unlock of value and consistent intend to redeploy capital to preserve the value of the assets and liabilities that are residual to the strategic review process so far. And that gives us the ability to manage those in a value-accretive way going forward and redeployed the capacity, the capabilities that we have and the balance sheet that we have and the track record that we have in a manner that is familiar and proven historically to create platforms that unlock such value. I think that -- I hope that's clear.

Our next question comes from Priyanshi Mishra from ABI Analytics.

I just have 2, few questions. So first, since Orascom and OCI reached an agreement to combine their business, who will receive the proceeds from the sale of AGROFERT, newly combined entity or if you could provide any clarification on this point? And second would be, if you could provide clarification on the expected duration for retaining the Methanex stake? And how this shareholding fits into strategic road map?

Yes. Obviously, as of the date of the execution -- expected execution, which is in the first half of the Q1, all assets and liabilities, including future -- potential future proceeds would be to the benefit of the combination. In respect to the -- your second question, we will continue to evaluate all strategic options in respect of the assets and liabilities, the assets that we have and the stack will be inherited by the combination and will be managed as an active investment within the Orascom Capital vertical.

Okay. And just one follow-up question. What is the total debt outstanding at the end of 3Q '25?

We mentioned that the net debt figure as of the date of the trading report, which was earlier this week was around $59 million.

Our next question comes from Jeffrey [ Delgado ] from Kepler Cheuvreux.

Is there a chance that you can take us through the recommendation of the Board exactly and the recommendation of the independent expert. If they were convinced that this is such a good transaction, why didn't they put this merger up to the test of a [ whitewash ] transaction in the first place that we had seen the majority of the shareholders vote for the transaction rather than Sawiris included. And have I noted the paradox that while Sawiris recused himself from the process, he created the conditions for him to actually have control at the EGM vote. Therefore, kind of conflicting the initial conflict of interest that he was trying to avoid.

Thanks for your question. No, as I mentioned earlier, we have strictly applied all relevant laws pertaining to Dutch governance and legal codes. I think that has been closely scrutinized and evaluated in the process and respected. And in the process itself, the recusal was from any participation by NNS representatives in the Board's evaluation process and in the negotiations, again, applying what is legally required in that regard. I mean, that's all I can say in this respect.

Okay. And maybe just 1 last question. Can you just take us through exactly how the independent expert was appointed because the press release mentioned on several occurrences at the company appointed it -- but is it the independent Board that appointed it? Or is it the company?

There was two -- maybe two categories. The fairness opinion adviser in this case, was a Rothschild & Co that was appointed directly and by the independent Board who, through their subsets transaction committee, which was comprised of independent directors who supervised the process. So that's a direct retention of an adviser for the conduct of the fairness opinion by the independent Board. Additionally, they also retain directly the services of the Brauw, which is a reputable law firm to provide them with independent advice in relation to this process as well. The company further bolstered the advisory slate with hiring A&O Shearman because there was -- to help manage the transaction documentation and the various obligations that we have under existing contracts that need to be managed and to also further conduct due diligence to make sure that there is no sort of red flags that should have been taken into consideration in the fairness opinion when evaluating the exchange, that would have otherwise not been considere. Additionally, Deloitte was also hired by the company under the advice of the Transaction Committee to also conduct financial due diligence, again, to ensure that there are no red flags that would have warranted evaluation reflection in the exchange. And finally, the company also retained the services of ABN AMRO. As I described earlier at length to ensure that we have a mechanism to support all existing investors and shareholders and their ability to migrate or manage their holdings in the company and then organized and without the pressure of any forced selling as well, and they have been actively communicating with all available custodian banks to ensure that all information that is needed is available out there. And we will continue to do this task for a significant period of time going forward. I hope that clarifies.

Our next question comes from in Stijn Demeester from ING.

Yes. 3 questions from my end, please. What's the status on the sales process for OCI Nitrogen? What value has been taking into account in setting the valuation of OCI in the context of the exchange rate? The circular mentioned the parameters of the valuation, but not explicit value. That's the first question.

Yes. I mean, we don't disclose individual pieces for strategic reasons, as you may appreciate. As in regards to that particular business, we'll continue to evaluate our strategic options. And I think the context that we create and the combination provides us with the necessary runway to pursue the best possible outcome in the future, which will be to the benefit of the all shareholders in the combined entity context. But it obviously was approached using standard methodology. And I believe in the material we provided, we -- in the material provided on Page 6 of the circular, where the methodology was described, which included, of course, DCS -- DCF approach in addition to looking at other comps for sanity check.

Okay. So similar question on the escrow money, the $360 million. Also there, you give very little disclosure on what you actually take into account because there is no commercial issue here. So can you be a bit more specific on what assumptions you've done on the $362 million?

Yes. I mean in that regard, we've been very consistent from the start, and we've been disclosing our approach in the financial statements, which is -- has been repeatedly audited by PwC where we have valued these -- we value the existing indemnities within a probability-weighted range, both in line, like I said, with the auditors. And the same applied -- was applied to indemnities covering historical legal tax and other exposures that we have. And it is estimated there's been no meaningful change to the measurement of this contingent consideration since the end of 2024, our best estimate continues to be that the amount that's held in escrow will cover the potential indemnities or indemnification and as presented in the financial statements using the appropriate accounting standards. There are also obviously other contingent risks associated with this -- the various contracts that we have that are not captured in the sense but something that is -- that continues to be a risk that we have to manage going forward.

Last question, could you provide in context of the net debt position that has been disclosed for, I think, 9 December in the context of this, what is the remaining CapEx spend for Beaumont. Can you provide that number?

Yes. I mean that -- the -- we provided guidance to the market. We've updated the guidance to the market. As -- I think as of end of August, $1.39 billion was spent, and we have updated the guidance now that the cost to complete will take us to spike completion in the area of $1.7 billion, and it's something that we continue to try to manage. There's obviously been some overruns associated with the project. But at least compared to other projects in the U.S., I think we've done relatively well in managing the cost increases that have materialized and it's something that we're totally focused on bringing it to completion hopefully within the updated budget.

Sure. But you don't provide spend since end of June. So how can we interpret the net position for 9 December?

Yes, but it's been fully reflected in the fairness opinion and forecasted accordingly.

Yes. But the fairness opinion does mention that, no independent evaluation or appraisal of the assets or liabilities of OCI has been set. So yes, I'm serious to retake this one.

But the investment cost estimate is routinely reviewed with our auditors. So the inputs are carefully evaluated. And those inputs then were provided for the fairness opinion.

Our next question comes from Pim Postma from VEB.

Again, representing the VEB here. So we represent a lot of smaller retail investors, as Eric already said, primarily in the Netherlands, but also in Belgium. And I've heard a lot about a liquidation scenario for OCI as, let's say, some sort of a bottom valuation, which is considered in this combination, which I believe also is very understandable given the significant cash like elements, which are currently at OCI. So I basically have a very simple question. Can we please let's say, with a rough figure or rough share price range to that liquidation scenario on an OCI share basis?

We'll take your request into consideration, but at this time, I am unable to share the exact underlying analysis for various reasons associated with the files that are involved. So I think -- I hope my answer is clear in that respect. But what should provide comfort is that, that liquidation analysis was independently scrutinized by Rothschild, which is a reputable institution that would not provide a view in the fairness report without having done the necessary work and evaluated the assumptions that we provided. But as you can appreciate, there is only a few assets and liabilities left in the company and to get into a very transparent layout of the assumptions that have been used would actually compromise some of these some of these commercial situations.

All right. And then maybe just also a simple follow-up. Because eventually, the OCI shareholders will get about, let's say, EUR 4, EUR 4.20 after the combination. So what I assume from that is that the liquidation value you estimated is let's say, far below that value.

I can't comment on that, but as I mentioned earlier, the combination was compared to the liquidation scenario, and it was materially lower than the value that was described in the combination.

We have time for 1 last question from J.B. Rolland from Millennium.

On AFM filings, you're showing that immediately after the announcement of the exchange ratio, the reference shareholder increased his stake by buying OCI shares in the market at around EUR 2.8 per share. When the stock traded well below both -- I mean, basically post announcement and -- why was no cash alternative or buyout mechanism offered to minority OCI shareholders at the comparable value in this transaction? And how do you reconcile that with your application to treat all shareholders fairly given the 100% share-based structure and the 15% Dutch withholding tax on the Orascom share distribution.

As we mentioned earlier, we looked at all the various transaction permutations and structures that could be available. And again, it's all in the context not in individual isolation of the currency situation. Really, it was -- from the beginning, we've set out to conduct a strategic review, find the best exits in a market which is very difficult to do exits, make sure that these distributions reach our shareholders in a tax-efficient manner, which culminated in the $5 billion associated with the strategic review and prior to that $2 billion of operating dividends that we also shared. And consistently, we have thought about how to redeploy some of the capital going forward as we have done in the past in two previous iterations in having invested in two other industries in the past as well and have conducted, again, this type of exits. So with that in mind and with that intent that has been -- we've been very vocal about it and our intention from the start, we have looked at what could be the most commercially viable idea and platform that makes sense and that can house this potential growth targets that we have, but also provide a context that does not destroy value, which is in a wind-down scenario, we would begin to get into value destructive processes associated with the existing residual assets. And we found that this combination provides the necessary forum and tools and structure to do so. But there was no cash option available in this context to us that would have preserved the value in the way that this combination sets out to do. In regards to your -- I believe you asked a question about some additional shares acquired. We're unable to comment on any activity by the -- our largest shareholder NNS, which I believe is around 40% of the company. But I believe this followed all the necessary disclosures and that's how this information was provided immediately after any such purchasing activity. But I can't really comment on their decisions.

Understood. Can I ask if you were how -- I don't know, I guess, looking at the share price reaction has probably triggered a lot of discussions internally. I'm wondering how do you rationalize the stock market reaction on OCI?

I mean it's -- I think there's some short-term volatility associated with some of the migration that would be expected, should this deal be supported in the EGMs, which are scheduled late in January. However, we have ensured the mechanization and institutional support is provided through repeatable institutions on both sides of the transaction to ensure that all investors are able to hold shares going forward in the combined entity and sufficient and ample time is provided for them to do so. And should they not -- or should they decide not to do so or have some internal reasons or restrictions, then institutional support will be provided and avenues provided to support and orderly process from here on. And I think, as I mentioned earlier, this was something that we set out to do very proactively to ensure our minorities -- minority investors are -- get the absolutely best support available.

Thank you. That concludes our Q&A session. So I'll hand back over to Sarah for closing remarks.

Thank you. I believe we have now addressed the questions raised today and on the webcast, I think again, the same questions have been addressed. So we conclude. Thank you. And if there are any further questions outstanding, please reach out directly to Investor Relations, and we will follow up accordingly.

Thank you very much for attending today.

This concludes today's call. Thank you for joining. You may now disconnect your lines.