APICORP Divests 12 % Stake in Egypt-based ACBC

05/01/2011 – APICORP Divests 12 % Stake in Egypt-based ACBC

Proceeds to support APICORP’s efforts to further diversify into mid-stream sector

Cairo/KSA, 28 December, 2010: Setting in motion a divestment plan aimed at mobilizing funds for a new phase of investments, the Arab Petroleum Investments Corporation (APICORP), the multilateral development bank of the Organization of Arab Petroleum Exporting Countries (OAPEC), today announced that it has signed an agreement to sell its 12 % stake in the Egypt-based Alexandria Carbon Black Company (ACBC) to the Aditya Birla Group, the majority shareholder of the company. The divestment, APICORP’s first ever, was approved by APICORP’s Board of Directors at its fourth and final Board of Directors meeting for 2010 held in Cairo on 26 December. The Government of Saudi Arabia owns a 17% stake in APICORP.

Ahmad Bin Hamad Al-Nuaimi, Chief Executive and General Manager of APICORP said, “The agreement is further evidence of the rapid divestment potential of our investments. Hence, this sale is part of an investment strategy to redeploy funds for diversification into new midstream sectors, particularly oil refining, storage, transport and shipping.”

Al-Nuaimi went on to say: “The goal of each of our investments is to support our investee company in reaching a level of business stability and operational maturity from which it can sustainably accelerate its development. Since we invested in ACBC 17 years ago, we have seen the company evolve into the world’s largest production line in the carbon black industry and we now feel it is the right time to monetize the investment. We wish ACBC every success in continuing its exceptional growth story”.

Alexandria Carbon Black Company (ACBC) was established in January 1993 in Egypt with a paid-up capital of LE 99.5 million. APICORP has been a 12% equity stakeholder with a Board representation in ACBC since its establishment. The company produces various grades of Carbon Black (CB); the basic material used in the manufacture of tires and other rubber-based products like hoses and inks. Since commissioning its first CB production line in late 1994 with a production capacity of 20,000 tons per year, the Company sought to maximize its exports, and has reached a production capacity of 285,000 tons per year. The remarkable success of its exports to Western Europe led to a ten-fold expansion in its production capacity. ACBC’s total shareholder equity reached US$ 181.5 million by the end of 2009.

Dr. Santrupt B Misra, CEO, Carbon Black Business and Director, Group HR, Aditya Birla Group, said: “APICORP has played an important role in the growth of ACBC since investing in the company 17 years ago. We are sad that APICORP will no longer be part of ACBC’s investment family, but at the same time we are pleased that we will continue our partnership with APICORP in Alexandria Fiber Company (AFCO) in which we are both equity partners. We also look forward to exploring new investment partnerships with APICORP in the future.”

APICORP seeks to actively continue exploring long-term growth opportunities for all its businesses in Egypt. Currently, APICORP holds equity stakes in five Egypt-based companies including Oriental Petrochemical Company (OPC), Alexandria Fiber Company (AFCO), Misr Fertilizers Production Company (MOPCO), Egyptian Methanol Methanex Company (EMethanex) and Egyptian Bahraini Gas Derivatives (EBGDCO).

Al-Nuaimi further said, “In the last few years, ably steered by its leadership, ACBC has consolidated its position as one of the world’s most productive carbon black manufacturers and we are confident that the company is positioned to achieve even greater successes. Our divestment in ACBC is in line with our efforts to constantly create new spirals of investment and value in the oil and gas industry. We are also looking at exiting a few more mature investments like ACBC in order to bring the fresh capital for a more diverse investment portfolio.”

As part of its 2010 – 2014 five-year plan objective, APICORP is seeking to broaden its investments across the MENA oil and gas industry spectrum, especially in midstream projects. According to recent APICORP research, the region’s oil and gas industry offers an investment potential of around $615 billion and many attractive opportunities that match APICORP’s strategic priorities.

Since its founding, APICORP has played a vital role in fostering the development of the Arab energy industry. The Bank has invested in 14 joint ventures in the oil and gas industry. It has also participated in direct and syndicated energy transactions worth an estimated $123 billion and lent about $10 billion to member countries and other Arab countries. APICORP expects to double its direct investment portfolio by the end of its 2010-2014 five year plan from a value of $339 million at the end of 2009.