Ethiopia: Habesha Eyes PTA Bank to Solicit Lifesaving Loans
Mesfin Abi, chief executive officer of
Habesha Cement S.C. , Gizaw T. Mariam, board chairman and main promoter
(middle) and Abebe Dinku (Prof), board member had to go through many
agenda points as they chaired the annual shareholders meeting at the
mini stadium, located on Ras Mekonen Street.
Habesha Cement S.C. has filed a loan application to PTA Bank, a.k.a Common Market for Eastern & Southern Africa's (COMESA), based in Bujumbura, Burundi.
This request followed after Habesha Cement, a fledgling industry with the largest ownership base in Ethiopia, lost funding after the state owned development bank buckled on its pledge of financing 70pc of the total project cost.
The cement plant in Holleta town, 35Km east of Addis Abeba, which will produce 1.4 million tonnes, is projected to cost a total of 130 million dollars, when it begins operation in 2014. Promoters of the company raised 150 million Br from over 16,000 shareholders, when they entered into a loan agreement, of 1.5 billion Br, in September 2011.
The Development Bank of Ethiopia (DBE) is now prepared to provide only 30pc of this amount.
"We've agreed that our Bank will advance 30pc of the loan in the next budget year, if Habesha could get the remaining financing from outside," Isayas Bahere, president of DBE, told Fortune.
Habesha's leaders, Gizaw T. Mariam, chairman, and Mesfin Abi, chief executive officer, are eyeing the regional bank hoping to get 60 million dollars in loans, sources in the company disclosed to Fortune. Habesha's foreign partners, South Africa's Industrial Development Corporation (IDC); and the International Financial Cooperation (IFC) may also be possible sources of additional financing, Fortune learnt. The latter is one of the major financiers of what is now the largest cement producer in Ethiopia, Derba MIDROC.
Close to 47pc of Habesha is controlled by IDC and another South African firm, Pretoria Portland Cement (PPC) Company Ltd. The emergence of these companies in Habesha's landscape has changed the composition of the board of directors when shareholders conducted their annual meeting in late January 2013, inside the mini-stadium near the National Theatre, on Ras Mekonen Street.
Mesfin, who was elected to the board of directors with a vote size next to Gizaw's 407,257 votes, had pledged to shareholders at the meeting that Habesha would be able to gather the required funds and open a Letter of Credit (LC). The company has hired the Chinese Northern Heavy Machinery Industries, Shenyang Co. Ltd., to carry out engineering, procurement and construction (EPC) contracts at a cost of 80 million dollars. Habesha has already advanced 7.9 million dollars to the turnkey contractor, according to company officials.
Habesha Cement S.C. has filed a loan application to PTA Bank, a.k.a Common Market for Eastern & Southern Africa's (COMESA), based in Bujumbura, Burundi.
This request followed after Habesha Cement, a fledgling industry with the largest ownership base in Ethiopia, lost funding after the state owned development bank buckled on its pledge of financing 70pc of the total project cost.
The cement plant in Holleta town, 35Km east of Addis Abeba, which will produce 1.4 million tonnes, is projected to cost a total of 130 million dollars, when it begins operation in 2014. Promoters of the company raised 150 million Br from over 16,000 shareholders, when they entered into a loan agreement, of 1.5 billion Br, in September 2011.
The Development Bank of Ethiopia (DBE) is now prepared to provide only 30pc of this amount.
"We've agreed that our Bank will advance 30pc of the loan in the next budget year, if Habesha could get the remaining financing from outside," Isayas Bahere, president of DBE, told Fortune.
Habesha's leaders, Gizaw T. Mariam, chairman, and Mesfin Abi, chief executive officer, are eyeing the regional bank hoping to get 60 million dollars in loans, sources in the company disclosed to Fortune. Habesha's foreign partners, South Africa's Industrial Development Corporation (IDC); and the International Financial Cooperation (IFC) may also be possible sources of additional financing, Fortune learnt. The latter is one of the major financiers of what is now the largest cement producer in Ethiopia, Derba MIDROC.
Close to 47pc of Habesha is controlled by IDC and another South African firm, Pretoria Portland Cement (PPC) Company Ltd. The emergence of these companies in Habesha's landscape has changed the composition of the board of directors when shareholders conducted their annual meeting in late January 2013, inside the mini-stadium near the National Theatre, on Ras Mekonen Street.
Mesfin, who was elected to the board of directors with a vote size next to Gizaw's 407,257 votes, had pledged to shareholders at the meeting that Habesha would be able to gather the required funds and open a Letter of Credit (LC). The company has hired the Chinese Northern Heavy Machinery Industries, Shenyang Co. Ltd., to carry out engineering, procurement and construction (EPC) contracts at a cost of 80 million dollars. Habesha has already advanced 7.9 million dollars to the turnkey contractor, according to company officials.
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