Daily News Egypt

Edita signs loan contract with IFC for $20m - Daily News Egypt

Advertising Area




Advertising Area




Edita signs loan contract with IFC for $20m

Operational phase of company’s new factory starts in Morocco in 2020


Edita Food Industries secured $20m in financing from the International Finance Corporation (IFC) to support the company’s growth plans.

The $20m represents the first tranche of the loan, with the contract including an option for a second tranche of an additional $10m.

 

The seven-year, medium-term facility may be used to finance the group’s capital expenditure plan, as well as growth opportunities in Egypt and across Edita’s growing regional footprint.

Commenting on the facility, Edita Chairperson and Managing Director, Hani Berzi, said, “We are proud to be joining hands with the IFC. Its financing is not just cost effective, but an endorsement of our robust corporate and industry fundamentals, coming as it does at the end of a nearly yearlong due-diligence process.”

Berzi added that, “We are actively exploring expansion opportunities both in Egypt and in our exciting expansion markets. Our goal in the medium term is clear: to solidify our dominant domestic position while growing into a regional snack food player.”

Edita has substantially reduced its local currency debt position as reflected in its declining net finance costs. This leaves ample room in its capital structure to take on the IFC facility.

Moreover, the cost of dollar-denominated financing is substantially lower than an equivalent facility in local currency in what remains a high-interest-rate environment. Edita’s foreign-currency revenue stream simultaneously provides a natural hedge against the future cost of servicing and repaying dollar debt.

Edita reported nearly 34% growth in gross exports in the first quarter of 2019, with exports as a percentage of total revenues growing from 7.2% to 8.7% in the same period last year.

The company incorporated Edita Morocco earlier this year and launched its ‘Freska’ wafer brand there. ‘Freska’ was supported in Morocco with advertising and marketing campaigns alongside digital and on-the-ground activations as Edita capitalises on its joint venture with the Dislog Group.

“Finalising this facility agreement and building a solid, long-term relationship with international organisations such as the IFC is a catalyst for the next phase in our growth story and opens up opportunities,” said Berzi.

Menatallah Shams El Din, investor relations officer at Edita, revealed that the company will complete leasing the land of its new plant in Morocco. As the plant’s construction work will begin this year, it will start operating by the beginning of 2020.

El Din added that the new financing contract will support the construction of the new plant in Morocco, as well as the allocation of another part of the expansions of the company in Egypt.

 

As for the impact of the dollar’s depreciation on Edita, El Din explained that these declines will have a positive impact on the cost of production as the company imports part of the production input.

 

Meanwhile for exports whose value decreases with the dollar’s depreciation, El Din said that the company is expanding its exports specifically with the aim of opening up new export markets.

 

Therefore, the export balance will not be adversely impacted. In fact, the plan is to increase it in parallel with regional expansions in the export process.

Advertising Area



https://cdn1.dailynewsegypt.com/2019/06/09/edita-signs-loan-contract-with-ifc-for-20m/
Breaking News

No current breaking news

Receive our daily newsletter
Subscribe