Raya Holding for Financial Investments, announced on Sunday, that its frozen vegetable and fruit manufacturing subsidiary, Raya Foods, has signed a loan worth €5m Mn with the European Bank for Reconstruction and Development (EBRD).
This is the first Developmental Financial Institution (DFI) to lend Raya since inception.
The loan would provide support the business’ rapid future expansions, boost the company’s ability to invest in new equipment and storage facilities to match the growing demand on its various product offering, Raya said in a statement.
Zaki Hashem & Partners acted as legal counsel to Raya Holding, Al Tamimi & Co. as local legal counsel for the transaction, and Bird & Bird as UK based legal counsel.
Janet Heckman, Managing director for the Southern Mediterranean (SEMED) region, said that this cooperation is in-line with EBRD’s strategic objectives in terms of enhancing the agribusiness value chain, and to improve food security, strengthen the distribution channels and developing a sector that accounts for a significant share of employment.
“The food and beverage sector in Egypt has witnessed some significant investments over the past few years. Therefore, we decided to enter this market in 2016 with an aim of securing a place among the top suppliers of frozen fruits and vegetables in Egypt and beyond. Our efforts in this deal are evident to our continued commitment towards attaining that goal,” said Medhat Khalil, Chairperson and CEO of Raya Holding.
The loan agreement is part of a €7.5m expansion project undertaken by Raya Foods to increase its production lines and warehousing capacity at its factory in Sadat City. Under the project financing plan, Raya is expected to contribute €2.5m in equity while the remaining €5m will be covered by the loan from EBRD.
The loan is expected to be disbursed across two tranches, with €3.4m Mn disbursed in the first tranche and €1.6m disbursed in the second.
Raya Foods Executive Chairperson Samer Al Waziri, said that, “Our investment efforts will allow us to meet our growing operational requirements while maintaining the levels of quality our company has become known for.”
