Five banks operating in the local market signed last week a syndicated loan agreement worth EGP 2.4bn for Oilex company, which will be used to establish an integrated industrial complex for the extraction, refining, and packaging of vegetable oils.
The loan was arranged under the leadership of the National Bank of Egypt (NBE) as the primary bookrunner, coverage guarantor, finance, and guarantee agent, and the First Abu Dhabi Bank as the book-runner, and account bank.
Chairperson of the NBE Hisham Okasha said this fund reflects the confidence of the local financial institutions in the economic feasibility of such projects, noting that the NBE and the bank groups involved in funding played a prominent role in providing expenditure for the implementation of several major projects, which enhanced these projects’ capabilities and enabled them to achieve a significant production boom.
Vice Chairperson of the NBE Yehya Aboul Fotouh said that over the last five years, the NBE participated in banking alliances with several banks for a number of joint loans, stressing that the success of this transaction is a result of the effective and fruitful cooperation between the participating banks, which is based on the strength of the relationship between those banks.
The NBE Head of Corporate Banking Sherif Riad said that the funding to Oilex aims to establish an integrated industrial complex for the extraction, refining, and packaging of vegetable oils with a target production capacity of EGP 1.5m tonnes.
He added that the loan amount represents 61% of the complex’s total investment cost, which makes it one of the largest investments in the North Africa and the Middle East region. It will aim to finance the project’s working capital, which will be injected when the project’s actual operation begins.
According to Riad, the financing period extends over seven years, including both the withdrawal, and grace periods. He noted that the alliance includes the NBE, which accounts for EGP 1bn, the First Abu Dhabi Bank which accounts for EGP 480m, Banque du Caire with EGP 370m, Arab Bank with EGP 350m, and the Suez Canal Bank for EGP 200m.
Chairperson of Oilex Sherif Ziadah said that the project’s main objective is to promote the industrial integration and local and international competition, and to provide products with the highest international specifications with a low price in Egyptian and Arab markets, to support the national economy. The project will also absorb thousands of direct and indirect jobs and reduce edible oil imports.