Edita Food Industries S.A.E. (EFID.CA on the Egyptian Exchange and EFIFq.L on the London Stock Exchange), a leader in the Egyptian packaged snack food market, secured USD 20 million in financing from the International Finance Corporation (IFC) to support the company’s growth plans. The USD 20 million represents the first tranche of the loan, with the contract including an option for a second tranche of an additional USD 10 million.
The seven-year, medium-term facility may be used to finance the group’s capital expenditure plan as well as growth opportunities in Egypt and across Edita’s growing regional footprint.
Commenting on facility, Edita Chairman and Managing Director Hani Berzi said: “We are proud to be joining hands with the IFC. Its financing is not just cost effective, but an endorsement of our robust corporate and industry fundamentals, coming as it does at the end of a nearly yearlong due-diligence process. We are actively exploring expansion opportunities both in Egypt and in our exciting expansion markets. Our goal in the medium term is clear: To solidify our dominant domestic position while growing into a regional snack food player.
Edita has substantially reduced its local currency debt position, as reflected in its declining net finance costs, leaving ample room in its capital structure to take on the IFC facility. Moreover, the cost of USD-denominated financing is substantially lower than an equivalent facility in local currency in what remains a high-interest-rate environment. Edita’s foreign-currency revenue stream simultaneously provides a natural hedge against the future cost of servicing and repaying USD debt.
Edita reported nearly 34% growth in gross exports in the first quarter of 2019, with exports as a percentage of total revenues growing to 8.7% from 7.2% in the same period last year. The company incorporated Edita Morocco earlier this year and launched its Freska wafer brand in the North African country, supporting it with advertising and marketing campaigns as well as digital and on-the-ground activations as Edita capitalizes on its joint venture with Dislog Group. Construction on Edita’s first manufacturing facility in Morocco is due to begin later this year.
“Finalizing this facility agreement and building a solid, long-term relationship with international organizations such as the IFC is a catalyst for the next phase in our growth story and opens up opportunities,” concluded Berzi.