8 March 2012    

Citadel Capital (CCAP.CA) confirms it is in advanced stages of discussions to confirm a financing package of approximately US$ 2.6 billion for the Egyptian Refining Company to finance the construction of a petroleum refinery in the Greater Cairo Area at a total investment cost of approximately U.S. $ 3.7 billion.

Participants in the debt package include a number of leading financial global institutions, among them the Japan Bank for International Cooperation (JBIC) and Nippon Export and Import Insurance (NEXI) as well as the Korean Export-Import Bank (KEXIM), the European Investment Bank (EIB) and the African Development Bank (AfDB). Mitsui & Co. of Japan, part of the consortium of contractors building the refinery, and the African Development Bank are providing a secondary facility.

The US$ 1.13 billion equity component for the refinery will be covered by global institutions and financial investors. Among the participants will be the Egyptian General Petroleum Corporation. Citadel Capital believes it may complete procedures with funding institutions and reach financial close in the second quarter of 2012 in the absence of external regional or international shocks.

The institutions named above had agreed to extend debt financing in 2010 (and this information was disclosed at that time). Citadel Capital had hoped to reach financial close in January 2011, but this was interrupted by the Egyptian Revolution and led to a re-examination of the project by various participating government entities. This led to a revised timetable for the project as well as changes by potential backers of the rate at which they had planned to invest in the project.

This disclosure does not represent a pledge or promise by Citadel Capital to reach financial close, only that it is management's current view that this closure may potentially take place in the second quarter, barring exogenous shocks.

The project foresees purchasing feedstock from the Egyptian General Petroleum Corporation at world prices for re-refining; production will be sold to the Egyptian General Petroleum under a 25-year offtake agreement at global prices. The project, when it enters production, will lead to a direct improvement in the quality of the air in the Greater Cairo Area by preventing the emission of nearly 93,000 tons of sulfur dioxide and 500,000 tons of carbon annually.

Citadel Capital has obtained the necessary regulatory and environmental approvals for the project and has signed a turnkey lumpsum construction contract with GS Engineering & Construction (Korea) and Mitsui & Co (Japan). It is expected that the establishment of the project will take about four years from financial close.

The firm will disclose any future developments regarding this project in a timely manner.

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