SODIC has just announced the signing of an agreement with Bank of Alexandria, a subsidiary of Intesa Sanpaolo for an EGP 350 million direct loan. Additionally, the agreement entails the refinancing of SODIC's existing loan of EGP 85 million from the same bank. The loan will be directed at fast-tracking Allegria's unit construction which is scheduled for delivery starting the second half of this year, well ahead of SODIC's contractual obligation to its clients. Units deliveries will allow SODIC to begin recognizing the value of the delivered units in its income statements. The Company currently has some EGP 4.2 billion of contracted unit sales that are yet to be recognized in its income statement.
Earlier this year SODIC raised EGP550 million through a highly successful rights issue. The signing of this agreement brings SODIC's new funding to EGP900 million. The Company is on track for achieving its objective of raising EGP1.5 billion by 2012 with the balance of planned funding to be raised through additional debt. The funds are being directed at financing the development of SODIC's diversified portfolio comprising various commercial, retail, and residential projects. A significant portion of the funds will finance the development of the high yielding and extremely lucrative for lease commercial/retail property which requires significant initial investment. The recurring revenue stream generated from these projects will help SODIC achieve strong annual return on its investment while allowing the Company to benefit from the appreciation of its real estate assets.
