US backs Citadel Capital with $150m credit

The Egyptian private equity firm intends to invest the lion’s share of the capital raised from a US government agency in Egypt - including Egyptian infrastructure - to support the transformation of areas reeling from the Arab Spring.

Egyptian private equity firm Citadel Capital has gained access to a long-term, $150 million financing facility provided by the United States Overseas Private Investment Corporation (OPIC), a government agency.
Citadel will direct the majority of the financing – or $125 million – to Egyptian assets as the nation’s political and economic reform continues to take shape.

The Egyptian private equity firm received formal affirmation for the 10-year credit facility amid approval from OPIC’s board. The financing, combined with a recent rights issue, lifts Citadel’s access to long-term financing to $325 million. As Citadel continues to rebalance its portfolio, the firm expects to generate another $50 million from “small divestitures” in early 2012, according to the firm.

“This is opportunity capital,” Citadel’s chairman and founder Ahmed Heikal said in a statement. “It gives us unprecedented flexibility to grow while simultaneously allowing us the freedom to explore new opportunities within our 19 platform companies amid any further economic headwinds from still-unfolding regional events. We will, however, remain very cautious.”

Citadel’s Hisham El-Khazindar, managing director and co-founder, boasted of the firm’s devotion not only to macroeconomic trends, but also its influence on energy and health initiatives in local communities. 

“Citadel Capital’s investments are helping refine cleaner-burning fuels, ease road congestion and curb emissions by transporting goods by river and rail, tackle solid waste problems and ensure food security among other things,” he said in the statement.

For its part, OPIC’s involvement in the region is part of a larger programme to support “investment in vital sectors” throughout MENA [Middle East and North Africa] countries, noted Elizabeth Littlefield, OPIC president and chief executive. She added:  “It addresses the shortage of credit in Egypt, where investment in important infrastructure sectors has been stymied by political uncertainty.”