** #3 IPO WATCH- Qalaa could list TAQA, ERC in 4Q2019, says Heikal: The reasonable assumption on a date for the listing of Qalaa Holdings’ TAQA Arabia and the parent company of the Egyptian Refining Company (ERC) should be 4Q2019, market conditions permitting, said Qalaa Holdings Founder and Chairman Ahmed Heikal in an interview with Bloomberg TV at the end of last week. Heikal had said back in the July that the IPOs were part of a plan to list as many as eight of Qalaa’s subsidiaries over the next five years.

ERC to be fully operational by May 2019: ERC’s USD 4.3 bn refinery in Mostorod, which is currently 98% complete, will be fully operational by May of next year, Heikal said. Construction on the refinery looks set to be complete in a month and the commissioning phase has started, he noted.

The second half of 2019 will see ERC hit its stride in terms of both revenue and profitability, said Heikal. And with the new International Maritime Organization fuel sulfur regulations coming to effect in 2020, ERC should be hitting very nice margins that year. EBITDA for ERC in 2020 — its first full year of operations — should be in the neighborhood of USD 1.5-1.6 bn.

Global oil prices have hit ERC’s projected margins slightly, but it was not pronounced, said Heikal. This is because ERC is a second stage refinery, so not as susceptible to crude price volatility. Heikal sees oil will stay at USD 70-85/bbl for some time. “We’re not subscribing to the USD 100 scenario, but at least in Qalaa, I’ll be happy.” As for TAQA, sourcing locally-produced gas from E&P companies is an option, as it is the largest private distributor of natural gas fuel in Egypt.

Algeria exit could take place in 2Q2019: Closing on the sale of its stake in Algerian cement company Zahana will depend on the pace of the Algerian government, he said. The Algerian government wants to complete the transaction before 2Q2019, he added.

You can watch the full interview here (watch, runtime: 6:47).