Bank Audi is participating in 20 syndicated loan deals and plans to participate, arrange and guarantee more syndicated loans in the upcoming period, Mohamed Sabry Adly, head of syndicated loans department at Bank Audi, said.
Adly told Amwal Al Ghad that Bank Audi’s syndicated loans department was developed in 2010, which means it is difficult to determine the Bank’s market share in syndicated loans sector in Egypt, especially that the events that followed 2011’s revolution have affected negatively large projects and in turn syndicated loans deals which witnessed a high growth in 2009 and 2010.
Bank Audi has set US$ 46.2 million as a credit limit for each debtor so that the Bank can participate more in syndicated loans offered to developing projects that have good solvency levels and provide good cash flow, Adly added.
Bank Audi targets increasing syndicated loans portfolio by 10%-15% up from last year, through focusing more on petrochemicals, fertilizers, cement, iron, communications, aviation and electricity sectors. Adly affirmed that the Bank will not be reluctant in financing any project that has acceptable feasibility study.
Adly added that the Bank will arrange and guarantee syndicated loans through arranging deals with banks in Egypt or through cooperating with the parent Bank Audi in Lebanon that already financed many projects in Egypt, reflecting Bank Audi Group’s positive view of investment in Egypt.
Besides, Bank Audi is currently arranging syndicated loans deals to finance petrochemicals, fertilizers and foods industries. Adly told Amwal Al Ghad that Bank Audi has recently shared with US$ 17 million in the US$ 145 million syndicated loan offered to Egypt Air Company.
Long-term loans do not hinder Bank Audi from participating in syndicated loans as the Bank has long-term savings accounts, Adly noted. In addition, Public-Private Partnerships (PPP) will highly contribute in boosting syndicated loan market as these partnerships usually implement large projects that need large finances.
Iron sector is still attracting banks’ loans despite the licensing problems iron factories faced, as the government reached agreements with the iron companies making them pay for these licenses. In addition, Egyptian government also worked on setting deals with investors who bought lands with low prices before the revolution. This means, Adly said, that investments in Egypt will flourish and the need for banking finances will increase. Adly confirmed that banks will not be reluctant in offering finances for investments as long as they are in right legal positions and have good credit levels.
The retreat syndicated loans sector witnessed in 2011 came as investors became unconfident in Egypt’s market because of the political turmoil and economic instability that followed the revolution, making them delaying investing in Egypt.
Adly added that banks are not suffering from a shortage of dollar resources and will not be reluctant in offering dollar finances for projects.