CAIRO: Egypt s Sixth of October Development and Investment (SODIC) aims to raise about LE 1 billion in debt to fund its key projects over the next 2 1/2 years, its CEO said. The company has little debt now - about LE 50 (million) to LE 60 million, according to its chief financial officer - but analysts had said it would need to take on more to finish its large Eastown and Westown projects in Cairo s satellite cities. We are working on getting syndicated debt, et cetera, but we don t need to actually draw it down immediately, Chief Executive Maher Maksoud told Reuters in an interview on Sunday. In the next couple of years, we d like to have a total debt of somewhere in the region of a billion pounds, he said, adding that the company does not take on loans unless they are backed up by existing receivables. In 2010, SODIC will spend LE 1.6 billion on its projects, mostly luxury mixed-use developments, which will be fully financed by cash already on hand, the returns from a share issue and money from sales, Maksoud said. In November, the company announced it was planning a LE 550 million rights issue. The subscription for that started on Sunday, and executives said they expected it to sell out. Maksoud was speaking at the opening of Forty West and Polygon, both mixed-use projects on its Westown plot that analysts have billed as barometers of demand for the company s products and for Egyptian high-end real estate in general. SODIC signed LE 40 million worth of contracts for Forty West on Sunday, the company s Chief Commercial Officer Youssef Hammad said. Maksoud said he expected to sell 60 percent to 80 percent of the projects over the next six months. Prudent borrowing Maksoud said his company was accelerating deliveries and had taken a bigger share of the Egyptian real estate market in the last year, thanks in part to its low level of borrowing. SODIC has always maintained a very prudent, conservative approach to debt, he said. All the projects that we are working on now are fully funded. The company s total delinquencies were down to about LE 6 million as of this week, he added. Forty West is about 35,000 square meters and Polygon is about 33,000 square meters, the company says. Westown, which SODIC is building with Lebanon s Solidere, has land of about 1.2 square meters and is designed to host homes, offices, stores and hotels. Maksoud said that SODIC would deliver about 800 units in its flagship residential Allegria project in 2010, with about 200 of these in the second quarter. SODIC posted losses in 2008 and the first three quarters of this year, but does not book revenues until it delivers units. Due to this, analysts tend to watch the number of contracts it signs, as well as its expected delivery dates and cash flow. Hammad, the chief commercial officer, said they would launch Eastown in June 2010.
