Methanex Egypt settles debt for Damietta plant
Methanex Egypt fully settles USD 530 mn debt ahead of schedule: Canadian-Egyptian methanol producer Methanex has fully repaid a USD 530 mn facility before it was due, according to a company statement (pdf). The company used the facility to partially finance its USD 1 bn investment in its Damietta methanol plant, which is Egypt’s sole methanol production facility. The financing for Methanex Egypt was arranged 15 years ago by a consortium of 15 international and two local institutions led by MUFG Bank. Participants included our friends at CIB, APICORP, NBE and Export Development Canada was well as HSBC, NATIXIS, Arab Banking Corporation, among others.
Foreign investors, watch this space: “EMethanex represents an outstanding model for project financing and joint venture success that the Egyptian oil and gas and petrochemicals sector and [that] the Egyptian business community could benefit from replicating,” said Methanex Egypt Managing Director Mohamed Shindy, noting that the company has “fully met all loan commitments” despite “the economic challenges following the start-up of our plant … in 2011.”
What does Methanex do? The plant in Damietta has a production capacity of up to 1.3 mn tonnes of methanol per year and serves both domestic and export markets. Methanex Egypt is owned 50% by Vancouver headquartered, publicly traded Methanex. State-owned institutions hold 33% of EMethanex, while APICORP owns 17%.
What can you do with methanol, anyway? Make lots of other things, ranging from adhesives, foams, plywood subfloors and solvents to windshield washer fluid. It’s found in high-performance plastics (such as your favourite tech toys), paints, car parts, building materials — a rather long list.
Advisors: Zulficar & Partners were Egyptian counsel to Emethanex, while Slaughter and May did international duties. Lenders were represented locally by Baker McKenzie, while Freshfields Bruckhaus Deringer was international counsel.