Alexandria Mineral Oils

AMOC produces light distillates, specifically high-margin diesel, which have specifications that do not meet international standards and are thus priced at a discount. Accordingly, AMOC's BoD approved early 2017 a plan to upgrade the company's Middle Distillates Dewaxing Unit (MDDU) to enhance the specifications of diesel and light distillates to Euro 5 standards. This project is expected to increase the prices of light distillates and thus significantly widen AMOC's margins. The project is expected to come on stream by 2020, at an initial investment cost of USD50 million. Even though AMOC is a debt-free company, it intends to finance this project through debt and the company is already in the process of requesting loans from several banks. However, the exact debt/equity ratio to finance project is not clear yet, and management should finalize negotiations in that regard by end July/August 2017. According to management, this project is expected to increase AMOC's revenues by USD6-7 million annually (c.EGP100-125 million/year).