| 07 Sep 2010 |
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ADIB leads Dh4b lending to Emirates Steel Industries
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ABU DHABI -- The Abu Dhabi Islamic Bank (ADIB), led the Islamic tranche of the Dh4 billion project finance facility for Abu Dhabi-based Emirates Steel IndustriesEmirates Steel Industries
, signalling an improvement in the lending environment for the
corporate sector. The ADIB, second largest Islamic lender, anchored the facility with the Dh920 million funding.
Eight banks and financial institutions participated in the funding.
Emirates Steel IndustriesEmirates Steel Industries sought the facility to expand its steel production capacity and diversify its product offering as part of its plan to become one of the largest integrated steel manufacturers in the region, in line with Abu Dhabi's vision 2030.
Earlier, in August, ADIB provided $300 Islamic financing facility to Abu Dhabi based Al Jaber Energy Services (AJES), a unit of Al Jaber Group to take up a construction project at the landmark Shah sour gas development project in Abu Dhabi.
For the Dh4 billion facility, ADIB acted as Islamic Arranger, and Islamic Documentation and Coordinating Bank, in addition to the Islamic Facility Agent.
"With this deal, ADIB has acted on its mandate to contribute to the UAE's growth and development by ensuring that the financing needs of UAE corporations and other entities are met," said Tirad Mahmoud, Chief Executive Officer of the bank.
He termed the deal as important for the UAE economy as it will be used for the expansion of a strategic project of national importance. It will create additional employment opportunities and revenue sources for the UAE.
In addition, this deal signals that the financing environment in Abu Dhabi is improving and could grow this year.
This also shows ADIB's unique capabilities to structure and arrange large and complex financing for major projects such as Emirates Steel IndustriesEmirates Steel Industries' expansion, with co-participation of Islamic and Conventional financiers to achieve an optimal outcome for the client".
, said, "ADIB im pressed us with their innovation and flexibility in structuring this large financing agreement."They were initially chosen due to their robust financial strength, commitment and experience in customising financing for many UAE companies.
"Their efforts and capabilities, that involved structuring this complex agreement with eight other banks in a dual-tranche Islamic and Conventional Facility, have justified our confidence in them," he further said.
Emirates SteelEmirates Steel, secured a $1.1 billion, in August, after signing a seven-year project financing agreement with a consortium of nine banks including two Islamic lenders.
The largest integrated steel producer in the UAE, which is a unit managed by the Abu Dhabi Basic Industries Corporation (ADBIC), a wholly-owned by General Holding Corporation (GHC), an Abu Dhabi Government-owned company will use the funds to carry-out its on-going expansion drive. Emirates Steel IndustriesEmirates Steel Industries has an output capacity of 2 million metric tons per annum, which is expected to reach 3 million metric tons in 2011 as part of its ambitious expansion plan.
By Haseeb Haider
© Khaleej Times 2010
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