Orascom Development Egypt (ODE), the largest subsidiary of Orascom Development Holding in Egypt, has signed CHF 228.1 mn (nearly EGP 3.82 bn) debt rescheduling package, a step coming to boost the company’s balance sheet and generate more flexibility in growing its projects, Invest-Gate reports.

“The transaction involves the immediate cash payment of [about EGP 325 mn], out of a total [roughly EGP 650 mn], with the remaining to be paid by end of June 2019,” the real estate developer said in a press release on June 12, emphasizing that ODE’s lenders agreed to decrease the interest rate margin on the foreign currency debt by 100 basis points – or 1%.

According to the statement, the move is foreseen to minimize the firm’s weighted average cost of debt from 10.5% to 9.3%, leading to annual savings of CHF 4 mn (EGP 70 mn) in interest payments for 2019, alongside a total of CHF 19 mn (EGP 320 mn) from 2019 to 2024.

“The rescheduling terms and conditions also entails amending the remaining debt principal repayment schedule to better match the cash flow generation profile of ODE and alleviates the pressure, without changing the final maturities of the loans by sculpting a ‘ballooned’ structure, whereby roughly 50% of the total debt principal is repaid in the final years,” read the statement.

On May 12, ODE reported that its net real estate sales soared by 282.8% to EGP 1.5 bn in Q1 2019 versus EGP 397.6 mn in the prior-year period, driven by a rise in unit sales at O West, its first home project, in addition to Red Sea resorts of El Gouna and Makadi Heights.

This came shortly after the developer has been officially added to the main Egyptian benchmark index “EGX30,” which includes the top 30 companies listed on the Egyptian Stock Exchange (EGX), as of February 3.