Company's market worth set to significantly decrease.

In the world of specialty chemicals, OCI has been making headlines recently. The fertilizer industry has been under pressure, but OCI has managed to thrive, thanks in part to strategic sales of stakes at high prices.

This financial success has led OCI to announce a significant cash dividend of 4.50 euros per share, a move that is expected to be approved at the Annual General Meeting (AGM) on August 21. The meeting will also see a nominal increase in the share price from two cents to ten euros.

The 4.50 euros per share dividend is a result of sales within the company, and if approved, an additional 9.98 euros per share can be returned tax-free to shareholders. This could potentially lead to billions of euros flowing to shareholders from the sale of the ammonia business, a decision expected to be made at the next AGM on September 24.

The Sawiris family, which controls 46 percent of OCI, ensures tax-efficient distributions, and investors are advised to check with their brokerage bank on how OCI's special payments are treated for tax purposes. If the brokerage bank treats these as dividends, a correction should be indicated in the income tax return for the tax year 2024 (Annex KAP).

Despite the upcoming distributions, the remaining intrinsic value of OCI is likely to be around eight euros per share. This suggests that the individual parts of OCI may be worth more than the whole company.

OCI's success can be attributed to a favourable raw material basis and its strategic position in the fertilizer business. The company's stock market value, however, does not fully reflect its worth, indicating potential growth opportunities for investors.

It's important to note that the distribution of 4.50 euros per share is not directly linked to the sale of the ammonia business. While the sale is expected to significantly boost shareholder value, it is not the only factor contributing to OCI's financial strength.

The German tax authority generally treats distributions from Other Comprehensive Income (OCI) as taxable income or affects the tax base depending on the nature of the underlying OCI items and specific tax regulations. However, the specifics may vary for tax advisors in other jurisdictions.

In the past, OCI has returned funds to shareholders through share buybacks, dividends, and capital repurchases. This trend continues with the current cash dividend and the anticipated sale of the ammonia business.

In conclusion, OCI's announcements of a substantial cash dividend and the potential sale of the ammonia business have excited investors, signalling a promising future for the specialty chemicals company. As always, it's crucial for investors to consult with their financial advisors to understand the tax implications of these distributions.