Loan Arrangers, KIMA Review Final Loan Agreement

The National Bank of Egypt (NBE), Commercial International Bank (CIB), Banque Misr, Banque Du Caire and Arab African International Bank (AAIB), arranging a loan for the Egyptian Chemical Industries Company (KIMA), held a meeting yesterday with KIMA’s representatives, financial adviser and lawyer to review the final agreement of the US$ 425 million loan.

Sources said the final agreement states that the dollar-currency loan has a term of 10 years and the local-currency loan has term of 12 years.

Sources added that the two parties agreed on the loan guarantees, disbursement process and pricing. The loan agreement will be signed this month after finalizing all “routine procedures”, sources noted.

The banks will provide half the finance in local currency and the other half in dollar currency. The loan will be used to finance the renewal of KIMA’s fertilizers factory and the construction of two lines for producing Ammonia and Urea powered by natural gas in Aswan.

The value of the loan was reduced from US$ 516 million to US$ 444 million and then lowered again to US$ 425 million after the feasibility study of the project shows that the investment cost is less than the value of the loan. Therefore, sources expected the banks’ contributions to the loan to be reconsidered.

It is worth mentioning that the Egyptian Chemical Industries Company (KIMA)’s profit reached EGP 37.3 million at the end of Q1 of FY 2012/2013, compared to EGP 9.04 million in the compared period, registering an increase of 313%.