Citadel Capital Closes $3.7 Billion Financing for Refinery

Citadel Capital SAE said it closed financing for a $3.7 billion petroleum refinery near Cairo, a project it said will cut the country’s diesel imports by half.

The financing package for Egyptian Refining Co. includes $2.6 billion of debt, already finalized in August 2010, and $1.1 billion of equity from investors led by Qatar Petroleum International with $363 million, or a 27.9 percent holding, and Egyptian General Petroleum Corp. with $270 million, or a 23.8 percent stake, the Cairo-based firm said in an e-mailed statement today.

The project is planned to produce more than 4.1 million tons of petroleum products annually, including more than 2.3 million tons of Euro V diesel, Citadel said, helping reduce imports. The announcement comes the same day Egypt’s constitutional court issued rulings that dissolved parliament and allowed Ahmed Shafik, former president Hosni Mubarak’s last prime minister, to remain in the final round of the presidential vote due to start June 16.

“The financial close of ERC confirms to international investors and the global community that Egypt is open for business,” Citadel Chairman Ahmed Heikal said in the statement. “The signal this sends is huge. ERC is a key component of Egypt’s energy security going forward.”

The loan package for ERC has $2.35 billion of senior debt and $225 million of subordinated debt from institutions including Japan Bank for International Cooperation, Nippon Export and Investment Insurance, the Export Import Bank of Korea, the European Investment Bank and the African Development Bank, Citadel said.

Construction is due to start at the end of 2013 when engineering works are completed.

Shares of Citadel were unchanged at 2.56 Egyptian pounds at the close in Cairo today, valuing the company at 2.12 billion pounds ($351 million). The stock is up 0.4 percent this year, compared with a 22 percent advance for the benchmark EGX 30 Index.

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