Qalaa Holdings subsidiary Egyptian Refining Company (ERC) is in talks for a debt restructuring agreement, ERC President Mohamed Saad said on 22 December. Negotiations to extend the loan’s tenor are currently ongoing, but lenders have not yet approved the extension, CFO Aliaa Heikal said. ERC reportedly has c. 2.1 bn in senior debt outstanding.

Who’s on the other side of the negotiating table? The lenders are Japan Bank for International Cooperation, European Investment Bank, Export-Import Bank of Korea, Nippon Export Investment Ins., and African Development Bank.

Qalaa had said last year it would begin a “full debt restructuring” for ERC, its flagship greenfield. ERC had been meeting its debt finance obligations since 2019 but began struggling to continue making the scheduled payments since the pandemic hit, attributing the disruption to the decline in demand pushing down oil prices. The company has, however, managed to begin making partial loan repayment installments last December.

ERC is currently carrying out technical studies to assess potentially increasing its capacity by 15% in the coming few years. ERC successfully inaugurated its USD 4.3 bn Mostorod petrochem facility — the largest private sector project of its kind in Africa — last year, which alone produces 2.3 mn tonnes of diesel fuel and 860k tonnes of high octane fuel, jet fuel and butane.

EDITOR’S NOTE- Updated on 24 December, 2021.

A previous version of this story stated that ERC had reached a preliminary agreement with its lenders to extend the tenor of the debt, which an ERC official told us was reported incorrectly by Al Mal. The story previously included an expected investment plan for next year following the debt restructuring, as well as a figure for outstanding loan payments, both of which were also reported incorrectly.