Egyptian cigarette monopoly Eastern Company signed a contract with three banks for a medium-term loan worth one billion Egyptian pounds ($183 million), the company said on Sunday.
The loan will help finance Eastern's new 5.5 billion pound complex in Sixth of October city, to be completed by 2012, said Osama Saad, head of finance at Eastern.
State-owned National Bank of Egypt lent the largest share at 480 million pounds, Banque du Caire provided 280 million pounds and National Societe Generale Bank (NSGB) contributed 240 million pounds, Saad said.
The loans will be payable over six years plus a two-year grace period, when only interest will be paid, the firm said in a statement to the stock exchange.
"We are expecting to finish our project on time and begin production and get back revenues on the 5.5 billion," Saad said.
He added that 51% of the project would be financed through debt and Eastern would cover the remaining cost.
Last year, the company took a 670 million pound loan for the new complex from Arab African International Bank, NSGB, Commercial International Bank and Banque du Caire, and one billion pounds in finance leasing from various banks, including the National Bank of Egypt, Saad said.
Eastern posted a 2% rise in net profit to 150.6 million pounds in the quarter to the end of September.
CI Capital had said in November that Eastern''s margin on earnings before interest debt and amortization (EBITDA) improved in fiscal year 20089 as it moved toward producing for higher-margin foreign brands owned by multinationals, including British American Tobacco and Philip Morris.
Eastern's shares closed 6.8% lower at 113.26 pounds.
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