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DMEA Commentary DMEA
– had a claim of 2.2 billion dirhams (US$233 million) validated.
Meanwhile, on July 26, the court in Moham- media ruled in favour of the state’s customs authority and convicted SAMIR of foreign exchange violations – imposing a penalty of 18 billion dirhams (US$1.9 billion).
Meanwhile, the trustees are continuing e orts to nd a buyer, but prospective investors have been deterred by onerous bidding condi- tions, in particular by the need to provide local nancial guarantees.
Morocco has adapted smoothly to full dependence on fuel imports since the closure of the kingdom’s only re nery but Rabat is under strong pressure from trade unions and other lobby groups to ensure the resumption of oper- ations while it lacks the will or the funds to rena- tionalise the plant.
Indeed, nationalisation was e ectively ruled our early last year, when Energy, Mining and Sustainable Development Minister Aziz Rabbah said: “Either it nds a buyer or it will be perma- nently closed.”
Uncertainty
While Exol’s bid may be small, the acquisition of SAMIR and Mohammedia is merely the tip of the iceberg.
A lack of clarity about the full extent of outstanding obligations has been among the
complaints heard from prospective investors but the total gure is generally estimated at around 44 billion dirhams (US$4.8 billion), with 13 bil- lion dirhams (US$1.4 billion) of this thought to be owed to Rabat.
With court rulings determining that the company failed because of poor management, Al-Amoudi has maintained that the closure was the fault of the Moroccan authorities. Early last year, he led a complaint against Rabat with the International Center for Settlement of Invest- ment Disputes (ICSID) in early 2018 and in April this year claimed that the government owed him US$1.5 billion in compensation for the failure of SAMIR.
ese uncertainties do little to attract poten- tial investors, particularly given the strict terms of the sale, which include restarting the re nery and providing local nancial guarantees.
e latter has reportedly been the main stick- ing point. Meanwhile, Rabat is torn between reluctance to take the company back into state hands and strong pressure from employee rep- resentatives to ensure that re ning operations continue at the site.
While Exol’s bid may be the only o er le on the table, with a turnover of GBP60.5 mil- lion (US$75 million) in 2017, the UK-based company may have a hard time convincing the authorities it can resume re ning operations let alone handle the debt burden.™
Sheikh Mohammed al-Amoudi
Week 24 19•June•2019 w w w . N E W S B A S E . c o m
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