Five banks
offer USD1bn loan to Egypt's Ethylco
By Mohammed Al Agamy
A number of Egyptian banks have
agreed to lend USD 1 billion loan to the Egyptian Company for Ethylene and
Derivatives, or Ethylco, to build an ethylene and polyethylene complex in
Alexandria with a project value of USD 1.427 billion, according to a person
close to the transaction.
The new plant will produce 400 kilo-tons per annum of
ethylene and its derivatives. It will provide the ethylene feedstock to the
second phase projects of the project, which includes production of styrene and
polystyrene in addition to polyethylene.
The twin-currency loan will come to the company as USD 630
million and EGP 370 million.
The National Bank of Egypt (NBE) is
expected to contribute USD 450 million, of which USD 270 million is in foreign
currency. Banque Misr will contribute USD 225 million, including USD 135 million
in foreign currency; the International Commercial Bank (ICB) will chip in with
about USD 175 million, including USD 105 million in foreign currency; Banque du
Caire will provide USD 75 million, of which USD 54 million is in foreign
currency; and the Arab International Bank (AIB) will contribute USD 75 million
in foreign currency.
National Societe Generale Bank (NSGB) is considering
participating in the facility, managing director Mohammed Al-Deeb said. NSGB's
contribution has not been determined yet.
A source in the Egyptian
Petrochemicals Holding Company (ECHEM) said Ethylco would have been exposed to
large losses if it had failed to obtain a USD 208 million bridge loan
this year. The board has approved a shareholders' guarantee for the bridge
loan.
ECHEM has a 51% stake in Ethylco along with Sidi Kerir
Petrochemicals Company (SIDPEC) and the Egyptian Gas Company (GASCO). Al-Ahli
Capital, the investment arm of NBE, holds 21% and Banque Misr and National
Investment Bank (NIB) hold 9% each. Nasser Social Bank and others hold a 10%
stake.
© Zawya 2012
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