UPDATE 2-Egypt’s OCI, Morgan Stanley form infrastructure JV

* Venture aims for total capital in billions of dollars

* Partnership could help OCI expand in the region

(Updates with chief executive comments, analyst)

By Alexander Dziadosz

CAIRO, Jan 26 (BestGrowthStock) – Egypt’s Orascom Construction
Industries (OCI) (OCIC.CA: ) has formed a 50/50 joint venture with
Morgan Stanley (MS.N: ) (Read more about the money market today. ) to develop and invest in infrastructure in
the Middle East and Africa, the companies said on Tuesday.

Governments across the region, particularly of oil-rich Gulf
states, are pouring billions into infrastructure to battle the
global downturn. OCI has focused on projects such as transport
and water treatment since Egypt unveiled its stimulus packages.

The firms have put up hundreds of millions of dollars for
the venture, and plan to boost that to billions through debt and
taking other partners, OCI Chief Executive Nassef Sawiris told
Reuters, declining to give specifics because of legal
regulations.

Sawiris said that Morgan Stanley would bring a great deal to
the venture “in terms of its networking, putting structure into
the venture, as well as financing. They will support us in deal
initiation through some of their global partners.”

The deal could help OCI, Egypt’s biggest listed builder,
juggle more work by providing a partner willing to absorb some
of the risk that comes with long-term projects. Morgan Stanley
would benefit from OCI’s regional expertise, analysts said.

“From Morgan Stanley’s side it’s obvious they want to get in
with someone who is pretty strong in execution, with a lot of
relationships in the region, with a big workload,” said Beltone
analyst Ismail Sadek. “It’s a good deal for Morgan Stanley.”

The venture is studying investments in power generation,
port construction, waste water management and other projects,
Sawiris said.

“Obviously the countries where we are strongly present will
probably have the larger deals,” he added, listing Egypt,
Algeria and Gulf Arab countries.

As of September 2009, infrastructure projects represented 60
percent of OCI’s $7.2 billion backlog of outstanding projects,
the construction firm said. Morgan Stanley Infrastructure, an
investment platform, manages $4 billion of investments.

“The coming decade will require higher investment rates in
infrastructure to sustain economic growth in the Middle East and
Africa,” Global Head of Morgan Stanley Infrastructure Sadek
Wahba said in a statement.

Shares in OCI traded down 0.1 percent by 1055 GMT, less than
the benchmark index (.EGX30: ), which shed 1.4 percent in a broad
sell-off.

OCI, which lists its shares in Cairo and London, has
interests in construction and fertiliser production. Many
analysts predict it will do well this year as fertiliser prices
continue to rise.

“2010, as expected, is proving to be a stronger global
fertiliser demand year. Prices are moving up and demand is
picking up,” Sawiris said. “We think 2010 will be a solid year,
and will continue in 2011.”

Stock Market Research
(Editing by Rupert Winchester)

UPDATE 2-Egypt’s OCI, Morgan Stanley form infrastructure JV