Morocco to lease SAMIR tanks, Ethiopia’s CEO Al Amoudi loses out
Even though a court ruling recently granted the Moroccan state permission to use SAMIR’s storage capacity, the national refinery’s liquidation saga has yet to come to a close.
The court ruling dated 14 May, whereby the Moroccan state successfully obtained – two days after submitting a request – permission to lease SAMIR’s storage tanks, startled the country, where the liquidation proceedings of the Mohammedia refinery have all the makings of a soap opera.
It has been over four years since one of the largest court cases in the country’s history kicked off at the Casablanca Commercial Court. On 21 March 2016, the judge ordered the liquidation of SAMIR, the Kingdom’s sole refinery. Saudi billionaire Sheikh Mohammed Hussein Al Amoudi owns a 67% interest in the refinery via his company, Corral Morocco Holding.
The company, which employed 867 people at the time, had amassed a debt of more than 45 billion Moroccan dirhams (€4.16bn), much of which it owed customs, ultimately leading it to cease operations in August 2015.
A liquidation extending to executives’ private assets
Since then, the liquidation proceedings have stretched on endlessly, despite two successive official receivers – Mohamed El Krimi was replaced, in May 2018, by Abdelkbir Safadi, following disputes that arose between the parties involved in the case.
But twists and turns have occurred one after another. For instance, in 2017, the former official receiver in charge of the liquidation, Mohamed El Krimi, requested that the liquidation be extended to the private assets of SAMIR’s executives, claiming that the latter’s mismanagement led to the current situation.
In November 2018, the commercial court ruled in favour of this extension to the personal assets of six of its executives (all foreigners): Ethiopian Mohammed Hussein Al Amoudi (CEO and majority shareholder), Saudi Jamal Mohamed Baamer (Director General), British Bassam Felix Aburdene (Director), British Jason T. Milazzo (Director), Swedish Lars Nelson (Director) and American George Salem (Director).
The ruling was upheld on appeal – proceedings which also resulted in the executives being prohibited from having any business dealings in Morocco over the next five years, but the decision will be difficult to enforce given that the assets in question are all held abroad.
Nationalisation: the preferred option
In February 2019, the Moroccan Competition Council became interested in the SAMIR case as it was preparing its opinion regarding the capping of oil company margins in Morocco. Driss Guerraoui, the head of the Competition Council at the time of the presentation of its report, regrets that “[p]rior to its shutdown in August 2015, SAMIR supplied the domestic market with 64% of its refined product needs […] the national refinery therefore played a fundamental role in supply, but also in storage, as it accounted for more than 50% of the country’s storage capacity, which safeguarded our country from any future shortages.”
Accordingly, the council openly advocated for the refinery’s “nationalisation” to maintain sovereignty and create an equilibrium between economic powerhouses in the market. The new head of the council, echoing SAMIR’s employees – who have demanded that the refinery be nationalised since the beginning of the proceedings – says that “preserving the national refinery will require bold political decision-making.”
An offer from Petroen Engineering
In September 2019, the Emirati company Petroen Engineering DMCC paid for an extensive media campaign in Morocco, publicising its offer to acquire SAMIR by using a great deal of editorial publicity. Aberrafii Bouhamria, the official receiver [HC1] in charge of the refinery’s liquidation, did indeed get a $2.4bn offer, an amount corresponding to the valuation of the refinery’s assets carried out by a local court-appointed expert, who estimated the value of the assets to be 21 billion Moroccan dirhams ($2.12bn).
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The Emirati company, held by Khurram Bin Latif Abdullatif Qureshi, reportedly had the financial backing of the Dubai subsidiary of the Canadian investment bank Canaccord Genuity and was seeking to obtain a guarantee from a Moroccan bank, but it appears that the offer has not made any further headway. The judge handling the case – perhaps put off by the media campaign – is taking his time to examine the offer.
According to our sources, no other concrete offers were sent to the court in spite of the numerous international companies that seemed to show an interest.
Finally, this past February, the official receiver, Aberrafii Bouhamria, gave the go-ahead for SAMIR’s facilities to be leased, a prelude to the decision handed down on 14 May. While the members of the national oil and gas union of the trade union confederation (CDT) had asked the judges to refrain from taking such a decision over concerns that it would discourage potential buyers, the recommissioning of the facilities could help preserve assets that have gone unused since the end of 2015.
For the time being, nothing is known about the framework of the contract between the government and the official receiver. According to our sources, the price and duration of the lease are still being negotiated. The agreement will enable the Kingdom to build up a significant inventory during a period marked by low oil prices. Thanks to these tanks with a capacity of 2 million cubic metres, Morocco’s inventory is expected to increase from 30 days to 90 days.