Egyptian Refining Company (ERC), a subsidiary of Citadel Capital, is negotiating with Egyptian banks over opening letters of credit (LC) and letters of guarantee (LG) for both Egyptian General Petroleum Corporation and Citadel Capital; domestic investors with value to US$ 300 million.
Familiar Sources told Amwal Al Ghad that negotiations are taking place with banks namely; Commercial International Bank, Banque Misr, HSBC, Arab African International Bank, Ahli United Bank and Mashreq Bank over this issue. However, banks’ shares are not determined till now.
These guarantees are offered to cover Egyptian General Petroleum Corporation’s liabilities to international institutions which are contributing in establishing a developed refinery. The financial institutions shareholders in the Company, who provided a loan in value of EGP 2.6 billion, had conditioned that in case the investment cost increases after 4 years, Company’s capital shall be raised to cover.
The investment cost of the project reached US$ 3.7 billion and has an annual capacity of 4 million tons of petroleum products; 2.3 million tons of Diesel, 860 thousand tons of benzene and 80 thousand tons of butane. The project is increasing balance of payments deficits by about US$ 3.6 billion annually.