Leading real estate developer Sodic has signed a long-term syndicated facility worth EGP1.57 billion ($100 million) with Arab African International Bank (AAIB) and Banque Misr (BM) to finance its West Cairo flagship development Sodic West.
The facility will be used to refinance EGP1.1 billion outstanding on the EGP1.3 billion medium-term facility signed in April 2017 and to partially finance the remaining Capex on the investment portfolio of leasable assets and real estate development projects in Sodic West.
The signing of the facility with two of Egypt’s leading banks, which acted as co-lead arrangers of the facility agreement, reflects Sodic’s credibility as a developer and the banks’ confidence in Sodic’s ability to deliver on its commitments.
This credibility, coupled with Sodic’s long-term relationships with Egypt's leading banks, facilitate the company’s access to the debt market, supporting Sodic’s growth endeavours.
The facility comes in line with Sodic’s goal to prudently increase its leverage to enhance shareholder returns and comes as a testament to Sodic’s solid financial performance, strong cash flows, and liquid balance sheet.
Sodic’s leverage remains low, with bank debt outstanding recorded at EGP2.4 billion on June 30, 2021, reflecting a debt-to-equity ratio of 0.4x.
The signing ceremony was attended by Magued Sherif, Sodic’s Managing Director; Sherif Alwy, Vice Chairman and Managing Director of AAIB, Akef ElMaghraby, Vice Chairman of BM, and senior members from Sodic and both banks.
Commenting on the transaction, Omar Elhamawy, Sodic’s Chief Financial Officer, said: “It is a pleasure to work again with AAIB and Banque Misr on this facility and to renew our long-term strategic relationship with these two leading banks. The facility will allow us to develop our investment portfolio of recurring revenue assets while preserving our cash resources and balance sheet’s liquidity to support ongoing operations and pursue growth opportunities.”
“The leading role of AAIB in financing real estate developers, relies on our expertise in offering comprehensive liquidity solutions needed for the execution of real estate projects, while enhancing investments, and providing credit facilities that cater to the needs of investors and developers,” added Alwy.
“This facility was a reflection to our belief in the importance of the role played by the Egyptian banks in supporting the real estate sector, addressing its financial needs, and encouraging NUCA projects that aspire to create new communities to combat overpopulation, representing an integral part of Egypt’s Vision 2030.”
ElMaghraby praised the cooperation between AAIB and BM, which led to the arrangement of this facility. He also emphasised that Banque Misr’s involvement in this facility reflects its leading role in supporting the Egyptian economy, particularly in the real estate sector, one of the most impactful sectors and the driving force behind other sectors in the local economy.
He added that supporting real estate is contributing to driving sustainable development plans in Egypt by establishing new integrated communities in new cities.-- TradeArabia News Service