Cairo (APD) - The Egyptian Fertilizers Company (EFC) said it will construct a second line for the production of ammonia and urea with investments of $322 million. The construction contract has been awarded to German engineering firm Uhde, al-Alam al-Youm reported Monday.
EFC said the second line would have the same capacity of first line of 635,000 tons of urea and 400,000 tons of ammonia, adding construction of the second line would take 33 months and would be delivered in September 2006.
The company said it would finance the new production line by planning a capital increase of $29.5 million, in addition to $81.6 million from the company's financial surplus and a medium-term loan of $211 million.
The company said it boasts a stable financial position and maintains a steady growth in profits. The company's net profits increased 2.7% to reach $ 65.3 million in 2004, compared to $ 63.6 million in 2003.
Currently there is an ongoing fierce competition to acquire the majority stake in EFC. While Saudi Basic Industries Corporation (SABIC) decided late-June to withdraw from the race to acquire stake in EFC, the local-led consortium by Egypt's National Fertilizers Company increased its offer. The competition has reached its peak between two competing consortiums.
In response to the offer from Egypt Kuwait Holding Company that was presented only one day earlier, the consortium led by Egypt's National Fertilizers Company, along with Citadel Capital Company and Financial Arab Investment Company increased on June 29 their offer to fully acquire EFC or 1,475,000 shares and decided to pay $ 501 per share, up from its previous offer of $ 475 per share.
Earlier, the consortium led by Egypt Kuwait Holding Company, which includes Kuwait's National Investments Company, Arab International Bank and a group of Arab investors, increased its offer to acquire a majority stake in EFC and decided to pay $500 per share, up from its previous offer of $462 per share. The consortium, offered to buy 88.25% stake in EFC that represents 1,301,688 million shares in a $650 million deal.
Homefield International PVT LTD Company, a subsidiary of Indian Tata Group, announced on June 20 its withdrawal from the race. In early June, Homefield International had increased its tender offer to acquire 100% of EFC and decided to pay $352 per share, up from its previous offer of $305 per share.
The public sector owns 46% of the capital of the company while the remaining stake is owned by private enterprises including an 11.75% stake owned by the Egypt Kuwait Holding Company. [EW-FC]
© APD (Arab Press Digest) 2005
