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Egyptian Refining's journey through restructurings and revolution
10 July 2012
Egyptian Refining Company’s refinery financing took in several restructurings and one revolution. Its lack of sponsor support allowed it to weather these with a shifting cast of equity providers.
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[ERC]
[citadel]
[ifc]
[egpc]
The process of closing the $3.7 billion financing for the Egyptian Refining Company (ERC) took in three successive restructurings. The first, in 2009, involved adapting the project’s structure to the aftermath of the September 2008 crash. The second, from August 2010, involved dealing with the departure of several equity investors. The third, from January 2011 involved resuscitating the project after Egypt’s revolution.
The third restructuring managed to preserve the margins, tenor, and coverages of the second deal, despite the intervening ravages of the eurozone crisis. In 2010 sponsors tried to revisit the debt terms of 2007, usually without success. By 2012, a 2010-vintage debt package looked comparatively attractive. During the seven-year development process, however, the underlying commercial rationale for the project never changed.
The $2.6 billion debt package survived the events since the 9 August 2010 signing of financing documents with very minor alterations. The equity, on the other hand, was a...
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