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Five banks to extend EGP2.3bn bridge loan to El-Canal Sugar Co.

Monday 25 June 2018 04:42 PM


By Mohmed Salem
A banking consortium made up of five locally-based banks  clinched a final agreement this week to arrange a bridge loan worth EGP2.3bn to the advantage of El-Canal Sugar Co., partially owned by the UAE-based Al-Ghurair Group.
The consortium is made up of the National Bank of Kuwait, National Bank of Egypt, QNB Alahli Bank, Bank of Alexandria, as well as another one due to be disclosed later on.
With brigde loans having  short-term tenure and used until a company secures permanent financing, El-Canal Sugar Co. is relying on such type of loans to meet urgent financial obligations including down-payments  in order to serve the purpose of building a beet-processing sugar factory as well as growing diverse crops to the west of the Upper Egypt province of Almenia at a cost of EGP1bn.
The consortium will extend EGP385 and USD70mln immediately upon signing the contract, of which EGP224.6mln, EGP64.2mln, EGP35mln, EGP61.6mln, EUR16.1, EUR8.4mln, EGP34.65mln, and USD10.5mln will be given from NBE, NBK, QNBAlahli Bank, Bank of Alexandria, and a fifth bank respectively.
With a 9-month tenure, El-Canal Sugar Co. is obligated to make monthly payments of  interest rates,  then of the principle, as both may be self-funded or be reliant on  another core loan worth EUR700mln.
El-Canal Sugar Co. has doubled areas allotted for reclamation during the first year to 40k acres up from only 20k acres, according to statements delivered previously by chairman Eng. Islam Salem, citing an increasingly growth potential for the Egyptian market.
The project, aiming at plugging  a widening gap inside Egypt's sugar consumption estimated at 75% totaling an output of 750k per year, is set to provide 20k direct job opportunities  in construction and indirect jobs for 3k workers as well as 60k farmers.