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Thursday, 1 August 2019

Egyptian Refining Company, Suez Cement, Arabian Cement sign petroleum coke supply agreements

Qalaa’s ERC signs pet coke supply agreements with Suez Cement, Arabian Cement: Qalaa Holdings’ Egyptian Refining Company (ERC) has inked agreements with Suez Cement and Arabian Cement to supply 500k tonnes of petroleum coke each year. Arabian Cement has agreed (pdf) to purchase 300k tonnes a year while Suez Cement will receive 200k (pdf), according to their respective EGX filings.

Separately, Qalaa announced yesterday that its share in ERC was diluted to 13.14% following the latest funding round in May. The investment company reduced its 19% stake after co-owners Qatar Petroleum and state-owned Egyptian General Petroleum Company underwrote USD 192 mn in additional equity for the USD 4.4 bn refinery. EGPC underwrote USD 50 mn of the USD 120 mn funding round in May, which included a USD 70 mn capital increase. Qalaa is banking on ERC to boost the company's profitability and expected it to start generating income in July. Chairman Ahmed Heikal said in May that he expects the refinery to generate more than EGP 90 bn in revenues next year. Qalaa’s share price dipped following the announcement and due to concerns over low prices affecting the refinery’s profitability Radwa El Swaify, head of research at Pharos, told Reuters.

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