Apicorp to increase its callable capital to $8.5bn

The lender also increases its authorised capital to $20bn as it plans to grow its energy sector investments

Apicorp's headquarters in Al Khobar in Saudi Arabia's Eastern Province. The lender decided to increase its callable capital to $8.5 billion from $1bn. Image courtesy of Apicorp

The Arab Petroleum Investments Corporation (Apicorp), a multilateral lender,  is increasing its callable capital to $8.5 billion (Dh31.21bn) from $1bn to boost investments in the energy sector.

The lender will also increase its authorised capital to $20bn, from $2.4bn previously, and its subscribed capital to $10bn, up from $2bn. Callable capital is the amount the lender can call from shareholders, but which has not yet been paid.

The increases are being made following approval by its general assembly of recommendations by its directors, Apicorp said in a statement. It is also transferring $500 million from its general reserves and retained earnings into its issued and fully paid capital.
"As we enter the next stage of Apicorp's growth story and build upon its longstanding reputation as a trusted financial partner to the Arab energy industry, the capital increase will enable Apicorp to fulfil its policy mandate by continuing to deliver sustainable impact-driven development projects and supporting investment activities," Dr Ahmed Ali Attiga, chief executive of Apicorp, said.

Apicorp is a Dammam-based multilateral lender owned by the 10 members of the Organisation of Arab Petroleum Exporting Countries including Saudi Arabia, UAE, Kuwait, Libya, Iraq, Qatar, Algeria, Bahrain, Egypt and Syria. It was set up in 1975 to extend financial support to Arab countries in the energy sector.

To date, it has made over $16bn worth of investments in oil and gas joint ventures and participated in direct and syndicated energy finance transactions worth over $130bn, according to its website.

“The capital increase serves as one of the cornerstones of Apicorp’s growth plans as per our board-approved risk appetite and five-year corporate strategy," said Dr Sherif Elsayed Ayoub, chief financial officer of Apicorp. "These include increasing our lending and investment capacity to better meet the ever-growing needs of our public and private-sector partners in the energy sector.”

Earlier this month, the lender reported a 17 per cent year-on-year increase in recurring income for 2019 to $112m. Net profit attributable to shareholders, however, dropped to $111.6m from $182.8m, although the prior year figure included an $86.6m one-off gain from a divestment.

In December, Apicorp also agreed to two loan facilities worth a combined $250m with Sonatrach Petroleum Investment Corporation, a subsidiary of Algerian national oil company Sonatrach, to fund the maintenance of its Sonatrach Raffineria Italiana complex in Sicily as well as for the purchase of Saudi Aramco crude.

Moody’s Investors Service in October upgraded Apicorp’s long-term issuer and senior unsecured rating to Aa2 from Aa3, both of which are high quality and very low credit risk rating categories.