Egypt’s Orascom Construction Industries (OCI) claims that its wholly-owned subsidiary, Algerian Cement, has signed a US$112mn loan to build a second production line in Algeria.
OCI says the new facility will have an annual capacity of 2.2mn tonnes and will increase the firm’s total production to 4.4mn tonnes a year, making it the biggest cement producer in Algeria.
OCI said in January that ACC had signed a US$153mn deal with Danish company FL Smidth to construct the second production line, which should be completed by mid 2005.
The loan was syndicated by a group of international banks, which had participated in financing the first production line. Citibank International London was the lead arranger.
“The continued involvement of the European Investment Bank (EIB) … and other lenders in financing the second production line at interest rates more favourable than those applicable to the first production line demonstrates their confidence in the track record of the OCI,” chief executive officer Nassef Sawiris says.
The first production line was financed in December 2002 and saw US$156mn raised in four tranches, stretching the EIB and IFC tenors to 10 years (see ‘Best Deals of 2002’, GTR, Jan/Feb 2003, p25).
Algeria faces a housing shortage, exacerbated by an earthquake in May 2003 that killed 2,300 people and caused US$5bn in damage.