CAIRO: Egyptian developer SODIC plans to secure a LE 400-500 million ($73-91 million) loan in coming weeks to fund its move into commercial property, an executive said on Tuesday.
The company, also known as Sixth of October Development and Investment Company, which has previously focused on home sales, has said it wants the leasing of commercial property to bring in LE 400 million a year by 2014.
SODIC decided to take the loan after it estimated it would need LE 1.5 billion to finish the commercial components of its projects over the next three years, Investor Relations Manager Abdel Fattah Allam told Reuters.
Now that the market is good, we said, let s go out and get the money now and keep SODIC secure for the next three years, he said, adding the firm was discussing the loan with several banks but had not settled with one yet.
In December, SODIC said its debt stood at around LE 50-60 million but it aimed to raise about LE 1 billion in debt over 2-1/2 years to fund key projects.
The company plans to start delivering homes in its Allegria project west of Cairo in the fourth quarter of this year, and deliver some 300 units in 2010, Allam said.
That is fewer homes than SODIC predicted last year it would deliver in 2010, but the firm said it was still ahead of an earlier schedule by 1-2 years in some cases.
Many homebuyers in Egypt buy houses off-plan, or before delivery, and wait as much as five years between signing the contract and receiving the house. SODIC and other developers do not fully recognize sales until they deliver homes.
Shares in the developer closed up 11.3 percent on Tuesday on market talk it would sell a stake to investors. The firm had no immediate comment on the rumor. -Reuters