The $110 million transaction will increase APICORP’s share in the joint venture from 7% to 17%. Subject to completion of certain conditions precedent, the companies expect the sale to be finalized by the end of 2013.
The equity acquisition is aligned with APICORP’s strategic objective of deepening its support for midstream and downstream sectors in the region’s hydrocarbon industry.
APICORP, a Multilateral Development Bank owned by the ten member countries of the Organisation of Arab Exporting Countries (OAPEC), has been a stakeholder in EMethanex since its inception in 2005. APICORP has also been a Senior Lead Arranger for the financing arranged in 2006 for the construction of EMethanex.
Ahmad Bin Hamad Al Nuaimi, Chief Executive and General Manager of APICORP said: “We are pleased to expand our direct equity participation in EMethanex, a company that has over the last decade developed into an important methanol production hub.
"One of the key focuses of our ongoing diversification programme is to support companies that are helping expand the Arab world’s downstream production capabilities. We believe that such capabilities are critical for Arab economies to maximise economic gains from their vast hydrocarbon resources. EMethanex’s impressive production capabilities give it considerable value-creation potential.”
Following the equity transaction, Methanex, the world’s largest supplier of methanol, will continue to remain the operator and majority shareholder of EMethanex with just over 50% ownership.
The remaining 33% interest is held by the Egyptian government, through Egyptian Petrochemical Holding Company (ECHEM); Egyptian Natural Gas Holding Company (EGAS); and Egyptian National Gas Company (GASCO). Subject to completion of certain conditions precedent, the companies expect the equity sale to be finalized by the end of 2013. The transaction will not create any governance or operational changes.
The company’s production facility in Damietta, Egypt is an important job-creator for the local economy. It created 3,500 jobs during the construction phase and currently employs over 450 full-time Egyptian employees and contractors.
The Damietta plant is considered one of the most energy efficient methanol plants in the world. With a production capacity of 1.3 million tonnes of methanol per year, it supplies both local and global methanol markets.
“We believe Egypt’s hydrocarbon industry possesses significant long-term growth potential and we are continuing to seek promising investment and financing opportunities in Egypt that are aligned with our strategic diversification priorities. As part of our mandate of developing the Arab energy sector, we seek to support companies like EMethanex that can deliver tangible economic value to member countries such as Egypt,” said Al Nuaimi.
Since its founding in 1975, APICORP has played a vital role in fostering the development of the Arab energy industry. Over the last 37 years, APICORP has invested, as an equity owner, in a total of 22 oil and gas joint venture projects worth in excess of $16 billion.
At the same time, APICORP has participated in direct and syndicated energy finance transactions worth in excess of US$130 billion. APICORP‘s aggregate commitments in these transactions, both in equity and debt, are valued in excess of US$12 billion.
Arab Petroleum Investments Corporation (APICORP)
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