Egypt's Eastern gets $183m loan from 3 banks
Cairo, December 6, 2009
Egyptian cigarette monopoly Eastern Company signed a contract with three banks for a medium-term loan worth EGP1 billion ($183 million), the company said on Sunday.
The loan will help finance Eastern's new EGP5.5 billion complex in Sixth of October city, to be completed by 2012, said Osama Saad, head of finance at Eastern.
State-owned National Bank of Egypt lent the largest share at EGP480 million, Banque du Caire provided EGP280 million and National Societe Generale Bank (NSGB) contributed EGP240 million, Saad said.
The loans will be payable over six years plus a two-year grace period, when only interest will be paid, the firm said in a statement to the stock exchange.
'We are expecting to finish our project on time and begin production and get back revenues on the EGP5.5 billion,' Saad said.
He added that 51 per cent of the project would be financed through debt and Eastern would cover the remaining cost.
Last year, the company took a EGP670 million loan for the new complex from Arab African International Bank, NSGB, Commercial International Bank and Banque du Caire, and EGP1 billion in finance leasing from various banks, including the National Bank of Egypt, Saad said.
Eastern posted a 2 per cent rise in net profit to EGP150.6 million in the quarter to the end of September.
CI Capital had said in November that Eastern's margin on earnings before interest debt and amortization (Ebitda) improved in fiscal year 2008/9 as it moved toward producing for higher-margin foreign brands owned by multinationals, including British American Tobacco and Philip Morris.
Eastern's shares closed 6.8 percent lower at 113.26 pounds.-Reuters
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