Egypt’s developer Palm Hills Developments (PHD) has signed a medium-term loan agreement for EGP1.1bn with the Commercial International Bank of Egypt (CIB).
The company announced during a press conference held on Wednesday that the facility will replace an existing syndicated medium-term loan previously granted by Arab African International Bank (AAIB) and other banks.
The Loan is segregated into Tranches A and B, with maturity of five and four years respectively, complemented by a grace period of five months.
Tranche A will refinance Golf Views and Golf Extension projects worth EGP828m and EGP100m due to other projects. While Tranche B will refinance the outstanding exposure of Palm Hills Katameya by EGP171m.
PHD received a very competitive financing package, when compared to the terms and conditions of the existing syndicated medium-term loan, reflecting improvements in the company’s credit risk rating.
Yasseen Mansour, PHD’s chairperson and group CEO commented, “The facility will enable the company to increase its financial flexibility by improving its credit terms, whilst strengthening its relationship with CIB. The competitive financing package is a strong testimony to PHD’s continuously improving credit rating and sound financial position. This move comes in line with our strategic direction to focus on optimisation of leverage, reducing financing costs, and the enhancement of our cash flow position”.
For his part, Mohamed Fahmy executive board member at PHD said that the company’s financing is variable and evolving with market requirements.
Fahmy pointed out that the company has some bank facilities as it seeks to re-finance, elaborating that the company has a group of projects that they started financing years ago. Moreover, the implementation rate of our projects reached about 90 or 95%, therefore, the risk is low to get loans by banks.
He further noted that there are some other re-financing agreements that will be announced in the coming period.
Ali Thabet, PHD’s chief financial officer, said that his company welcomes the Central Bank of Egypt’s initiative to finance middle-income units, however, they are waiting for the final mechanism of implementation to see whether it is in line with the company’s policies or not.