Egypt to pay energy companies via bond sale, Dimian says

Egypt will pay back about $6 billion it owes to energy companies, including with proceeds from a bond sale that’s to take place “very soon,” the country’s finance minister said.

“We appreciate the patience and we expect them to hold up with us for a little bit longer, but it’s coming soon,” Hany Kadry Dimian said of the payment in an interview in Washington yesterday. “They’ve benefited well from investing in the country and we expect equally that when the economy is undergoing hardship, they stand shoulder to shoulder with us.”

Dimian said the government will pay for part of the arrears with savings from a recent reduction in fuel subsidies. Egypt will also issue an international bond and is seeking a guarantee from a country with a high credit rating for the sale, he said, declining to say how much will be raised. He also cited capital inflows as “possible resources” to meet the payments, without elaborating.

Egypt ran up the debts to companies including BG Group Plc (BG/) and Dana Gas PJSC (DANA) as its public finances deteriorated amid the political turmoil that followed the uprising of 2011. President Abdel-Fattah El-Sisi, the former army chief who was elected in May after leading the ouster of an Islamist government, has vowed to repair the economy. Last month, he raised fuel prices by as much as 78 percent, saying the measure was needed to save a nation “drowning in debt.”