Beirut-based finance house Middle East Capital Group (MECG) has won mandates to help restructure the finances of Royal Jordanian Airlines and raise equity for a hotel expansion in Lebanon. The mandates are the first to be announced by MECG since it was launched earlier this year (MEED 19:4:96).
MECG has been retained by Royal Jordanian ‘to assist in the restructuring of the airline’s aircraft leases and financing arrangements,’ a statement from the finance house says. ‘The amount of the financial commitments involved in the restructuring is estimated at $200 million,’ the statement adds.
The assignment was ‘in line with MECG’s strategy to assist government and stateowned companies in their restructuring and privatisation efforts,’ the statement adds.
‘This will represent a major step in Royal Jordanian’s efforts to further commercialise its operations and to position itself as a leading regional airline.’ Royal Jordanian has been looking for ways to deal with total debts amounting to about $700 million (see Jordan).
The other mandate is for ‘the structuring and management of a private placement for the simultaneous sale of equity interests and capital increase’ of Societe Hoteliere de Tourisme in Lebanon.
The money raised will be used by the company to expand facilities at its Hotel al-Bustan near Beirut (see Lebanon). ‘The amount of equity capital to be raised is estimated at $15 million-20 million,’ the MECG statement said.
‘(The two contracts) are a reflection of what’s happening in the region. The market is really thirsty for this kind of thing,’ MECG’s managing director in charge of corporate finance Jamal Jarudi says.
The founding shareholders of MECG.
which has a capital of $30 million, are merchant bank Barclays de Zoete Wedd, the International Financial Corporation and the Bin Mahfouz family of Saudi Arabia.
A number of leading Middle Eastern businessmen are also shareholders in the institution.