KIMA Considers Issuing Dollar Bonds To Meet Banks’ Conditions

The Egyptian Chemical Industries Company (KIMA) considers offering dollar-denominated bonds in the Egyptian Exchange (EGX) to attract dollar resources after Egyptian banks conditioned increasing the company’s capital as a main guarantee to provide the company with loans worth US$ 423 million needed to convert its factories to natural gas.

Saleh Abou Al Yazid, President of Financial Department of Holding Company for Chemical Industries CIHC, said the increase in exchange rates is the result of levying more banking conditions. Therefore, banks demanded from the company to raise its capital as a guarantee and the company asked foreign banks for dollar liquidity.

The increase in dollar’s price compelled the company to provide US$ 50 million. In addition, the company currently conducts a feasibility study to offer dollar bonds. The study will be submitted to the Egyptian Financial Supervisory Authority (EFSA) within a month at most. Restructuring the company’s factories to switch to natural gas will save 17 MW power for the country which requires EGP 1.5 billion.

Abou Al Yazid called on CIHC’s subsidiaries to keep their dollar liquidity so as to strengthen the company’s capability to provide KIMA with dollar liquidity.