Egyptian Fertilisers to borrow $1.25bn

Egyptian Fertilisers Co. plans to take on $1.25 billion of debt to help its new owners, including Dubai-based private equity firm Abraaj Capital, finance their $1.41 billion acquisition, Abraaj said on Sunday.

Part of the debt, or $460 million, will be for refinancing existing loans at the nine-year-old urea-producing company, Tom Speechley, executive director at Abraaj, told Reuters on Sunday.

Another $735 million will go towards financing the acquisition by the Abraaj-led partners, Speechley said.
Deutsche Bank AG will arrange the sale of $400 million of bonds that comply with Islamic ban on the receipt of interest, Speechley said.

The bonds, or sukuk, will have a maturity of at least five years, extendable to ten, with a portion convertible to shares in Egyptian Fertilisers, he said, declining to give details.

The remaining $850 million will be raised in two loans, one for seven years and other for eight, he said.
Abraaj led the firms that bought Egyptian Fertilisers and included Dubai Capital Group, which is owned by the ruler of the Gulf Arab emirate.

Abraaj controls Egyptian Fertilisers, which produces about 1.3 million tonnes per year of urea for export. The Egyptian firm is carrying out works to increase capacity within 18 months, Arif Naqvi, Abraaj's chief executive, told reporters earlier on Sunday. He declined to give details about the expansion plans.

"We think that there is enormous growth in this sector," Naqvi said.

The deal to acquire Egyptian Fertilisers' 320 million shares at $4.41 each went through on Sunday, the Egyptian stock market said in a statement.

Saudi food company Savola Group, which was the Egyptian company's biggest shareholder, said on Saturday it had sold its 30% stake in Egyptian Fertilisers for more than double the price it had originally paid.

Egyptian Fertilisers has a stake in a urea project under construction in Nigeria with initial planned capacity of 565,000 tonnes, Abraaj officials said.

It is also in initial talks with the government of Pakistan to develop a plant in the South Asian state and is interested in developing facilities in Algeria.

Abraaj is also interested in acquiring more companies that produce urea on expectation global demand for fertilisers will rise, to grow more corn and other plants used to make fuels such as ethanol, Naqvi said.

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