Qalaa’s Egyptian Refining Company completes financial restructuring as it drives to completion.
Qalaa Holdings subsidiary Egyptian Refining Company (ERC) has reportedly completed a project finance restructuring that has seen the company take on new loans and equity commitments valued at around USD 500 mn, according to a press release from law firm Freshfields Bruckhaus Deringer, which advised on the transaction. This would bring the overall cost of construction of ERC’s refinery to USD 4.5 bn, according to the release, which ran in the Global Legal Chronicle. The restructuring came as part of an agreement with construction partners GS Engineering of Korea and Mitsui of Japan that will “allow construction to move forwards.” The 4.2 mn tonne-capacity refinery, which will produce up to 3 mn tonnes of diesel and fuel, was 95.7% complete at the beginning of this year, according to a previous statement by Qalaa Holdings Co-Founder and Managing Director Hisham El Khazindar.
Egyptian Refining Company’s signing a joint-venture with GS Engineering & Construction Corporation and Mitsui & Co., Ltd.
Freshfields Bruckhaus Deringer LLP has advised the Egyptian Refining Company (Takrir) S.A.E. (‘ERC’), the company behind the development of Egypt’s largest oil refinery, on the settlement of a deal with the construction joint-venture working on the refinery that will fund a series of delays to the project and allow construction to move forwards.
Freshfields has also advised the ERC on the project finance restructuring associated with the settlement. The refinery had a pre-restructuring construction cost of $ 4.0 bn and the restructuring involves additional new loans and equity commitments that are valued at around $500m.
The refinery, which is set to produce annually 2.25 million tons of diesel and 600 thousand tons of jet fuel in addition to LPG and other products, is a priority project for Egypt. The production from the plant will cover 30 – 35 per cent of Egypt’s diesel deficit.
The key shareholders of the ERC are the Egyptian General Petroleum Corporation (‘EGPC’), Qalaa Holdings S.A.E., a leading investment company in Africa and the Middle East and Qatar Petroleum International, the national oil and gas company of the State of Qatar.