Midor finances expansions through IPO

CAIRO – 21 March 2018: Middle East Oil Refinery’s (Midor) expansions require huge investments, which is expected to be achieved through the initial public offering (IPO) of company shares in the Egyptian Exchange (EGX), a petroleum sector source said.

Midor is currently expanding its refinery by the Italian Company Technip, seeking to increase the refining capacity to 175,000 barrels per day, up from 115,000 barrels per day.

The expansion of the refinery will increase production rates to 5 million tons of diesel and jet fuel, 105 million tons of gasoline, 276,000 tons of potassium, 140,000 tons of sulfur and 276,000 tons of coal.

The investment cost of the expansion project is worth $1.65 billion, divided into loans amounting to $1.2 billion, and self-financed by $450,000, with expectations to recover the company’s capital within 50 months.

In 2017, Midor refined about 40.5 million barrels and contributed more than 3 million barrels of various petroleum products to the local market, amassing to a total value of $1.4 billion, in addition to having exported 1.7 million tons amounting to $860 million.

IPOs of Public Companies

Midor’s IPO comes as part of a state program to float some state-owned companies in the Egyptian Exchange, under a five-year program announced in 2016, to attract investments and reinvigorate the stock market.

It also aims to increase funding to Egyptian companies and maximize benefits from state assets.

The Ministry of Finance announced Sunday that the Egyptian government elected 23 state companies for the first phase of the state IPO program, with a total shares value of LE 80 billion.

Market value of the soon-to-be-listed companies stands at LE 430 billion, the statement said, adding that the government intends to float about 15-30 percent of the companies in the Egyptian Exchange (EGX).

The first phase of the program will include five companies in the petroleum sector, including Enppi, Assiut Oil Refining Co (ASORC) and Alexandria Mineral Oils Company (AMOC).

This is in addition to six companies in the petrochemicals sector, including Sidi Kerir Petrochemicals Co, the Egyptian Ethylene and Derivatives Company, and three companies in the logistics sector.

As for financial services, the listing will include the Housing and Development Bank, Bank of Alexandria, Banque Du Caire, e-finance, and Misr Insurance companies, according to the statement.

The real estate sector will have two companies listed, while the customer service and industry sectors will each have one company listed.

The state IPO program comes in light of the economic reform program adopted by Egypt. President Abdel Fatah al-Sisi has directed the government to quickly implement the IPO program and ensure its success.

The Initial Public Offerings (IPO) program is conducted under the supervision of the Ministry of Investment.

It covers a period of three to five years, aiming to offer partial stakes in some state-owned companies on the stock exchange. It will serve as a main tool to attract local and foreign capital flows to Egypt.