The European Bank for Reconstruction and Development (EBRD) has made a $100 million equity investment in United Sugar Company of Egypt (USCE), a sugar refinery company owned by Saudi conglomerate Savola Group.
The investment includes $50 million working capital to boost local sales and exports. Another $50 million in existing debt will be converted to equity, reducing the company’s foreign currency-denominated debt and shoring up its balance sheet.
The capital is to bolster the private sector refinery company as it struggles through a period of challenging market conditions and fends off competition from Egypt’s predominantly state-owned sugar sector, according to the EBRD.
“Through this expansion of our partnership with Savola Foods and United Sugar Company of Egypt, the EBRD is very pleased to provide ongoing support to an important foreign direct investor in Egypt whilst simultaneously demonstrating the positive role the private sector can play in developing an efficient and modern food value chain in the country,” said Philip ter Woort, EBRD’s director for Egypt, in the statement.
The EBRD will also work with the company to bring its health and environmental practices into line with international standards and improve operational efficiency. The bank has invested more than €1.6 billion across 31 projects in Egypt since 2012.
The Savola Group is one of Saudi Arabia’s leading industrial houses, with holdings in the edible oils, snack foods, household items, garments, retail and dairy sectors, according to PEI Research and Analytics.
The group makes fund investments in the Middle East and Africa region with Intaj Capital and the Swicorp Joussour Fund.