Société Arabe Internationale De Banque (SAIB) announced the completion of an EGP 2bn syndicated loan for the Egyptian General Petroleum Corporation (EGPC) to meet its “internal and external needs” and to secure the continuous supply of petroleum products for the local market.
The deal is a contribution from the banking sector to revive the petroleum sector, said Chairman of SAIB Mohamed Naguib during a press conference held after Tuesday’s signing, noting that the banking sector has been the strongest sector in Egypt in the past ten years.
SAIB stated further that this agreement stands as a testament to EGPC’s “reputable repayment ability and its commitment to meet its financial obligations for the loan.”
The government announced earlier in December that it would repay $1.5bn of the $6.3bn owed to foreign oil firms, and added that a further $3bn will be paid in monthly installments until the end of 2017.
Thirteen banks have signed the 42-month loan, with SAIB acting as both the Mandated Lead Arranger and the major participating bank.
The bank consortium includes Al Ahli United Bank, Bank Audi, Egyptian Arab Land Bank, Egyptian Gulf Bank, Faisal Islamic Bank, Blom Egypt, Arab Bank, Arab Investment Bank, Piraeus Egypt, Al Baraka Islamic Bank, Industrial Development and Workers Bank and the National Bank of Greece.
Naguib stated that each of the thirteen participants in the loan has contributed to the deal equally.
The loan will be handed to EGPC in one installment on Thursday.
In 2010, EGPC and SIAB signed an EGP 2.5bn loan, which is due to end in 2014 and “marks the two entities’ longstanding and solid relationship,” the bank stated.
SAIB’s actual syndication portfolio equates to 26% of the bank’s total portfolio, the bank said.
Minister of Petroleum Sherif Ismail has stated earlier in November that the government has set aside $8bn in the general budget of the 2013/2014 fiscal year to assist in repaying the debts owed to foreign oil companies.
Chairman of EGPC Tarek El-Molla told Reuters on Monday that the organization will repay $1bn of its debt on that day and the rest will be reimbursed over the week.
The National bank of Egypt (NBE) had also announced in June that it would grant EGPC $1bn in the form of letters of credit on a monthly basis to import crude oil to meet the country’s fuel shortage.