Orascom Development Egypt secures $155-million loan from IFC

Feyisayo Ajayi -
Key Points
  • Orascom Development Egypt secured a $155-million loan from the IFC to refinance liabilities and fund hospitality asset upgrades, including the Mövenpick Resort.
  • The loan features a 2.5-year grace period and 8.5-year maturity, with repayments starting in 2027, enhancing liquidity and extending debt maturities.
  • ODE posted a 41.4% revenue increase in Q1 2024 and reported 74.9% growth for 2023, solidifying its market position amid expansion efforts.

Orascom Development Egypt (ODE), a subsidiary of the Swiss real estate firm Orascom Development Holdings, a leading group majority owned by Egyptian billionaire Samih Sawiris, has secured a $155-million loan from the International Finance Corporation (IFC).

The loan will be used to refinance existing liabilities and fund upgrades to the company’s hospitality assets, including the Mövenpick Resort and Spa in El Gouna. ODE aims to reduce credit spreads, extend debt maturities, and improve the overall debt profile of its parent company, Orascom Development Holdings.

Orascom refinancing boosts liquidity, cash flow

The loan features a 2.5-year grace period and an 8.5-year maturity, with repayments beginning in the latter half of 2027. 

Ashraf Nessim, Group CFO of Orascom Development, emphasized the benefits of the agreement. "The support from the IFC enhances our ability to optimize financing terms and reflects the strength of our financial and operational standing," Nessim said.

The refinancing will reduce capital costs, improve liquidity, and increase free cash flow, reinforcing the company’s long-term business strategy. ODE aims to maintain a net debt to adjusted EBITDA ratio below 1.3x to sustain a healthy balance sheet amid its expansion plans.

ODE’s growth redefines market presence

ODE, a subsidiary of Orascom Development Holding (ODH), has strengthened its market position with notable financial results. Naguib Sawiris, who led the group for nearly three decades, stepped down as chairman of ODH in December 2021.

In recent developments, ODE secured an extension from Egyptian authorities for its Makadi Heights project, expanding its pipeline. The firm posted a 41.4 percent jump in Q1 2024 revenue to EGP4.18 billion ($89.06 million) from EGP2.95 billion ($62.96 million) a year earlier.

For the full year 2023, ODE reported record revenue growth of 74.9 percent, reaching EGP19.5 billion ($631 million), up from EGP11.1 billion ($360 million) in 2022. These results highlight the group’s momentum in the competitive real estate and hospitality sectors.