Muscat - In a significant step in the continued growth of the industrial sector in the sultanate, Bank Sohar recently signed a contract agreement with Moon Iron & Steel Co (Misco), whereby the bank has been appointed as the sole arranger for tying up the entire project debt requirement of US$270mn.
The major steel project will comprise facilities to manufacture 1.2mn tonnes per annum of steel billets, out of which 700,000 tonnes per annum will be pumped into manufacturing hot rolls to produce rebars while 500,000 tonnes per annum are to be sold as steel billets in the market.
The facility is expected to commence production by September 2015, a press release said.
Highlighting the importance of the agreement, Dr Mohamed Abdulaziz Kalmoor, chief executive officer of Bank Sohar, said, "We look forward to supporting such an important integrated project for the country. It aims to partly fill the gap in supply of steel billets in the sultanate and is going to be a huge steel provider for the local market which in turn will service a number of industries. It will also provide employment opportunities to many Omanis."
Dr Kalmoor added, "We at Bank Sohar will be part-financing the project, which has been appraised by our project finance and syndication department, and additionally we will be syndicating about 40 per cent of the equity capital of the company from local institutions."
Mervyn Fernando, DGM of wholesale banking at Bank Sohar, said, "The project is coming up in phase 7 of the Sohar Industrial Estate, and is expected to commence production by September 2015. It is the first of its kind in the Sultanate for billet manufacturing with forward integration into rebar production."
The signing ceremony of the financing agreement was held at Bank Sohar's Learning Centre and was attended by the bank's corporate banking department staff as well as members of the investment/strategy department, the release added.
© Muscat Daily 2013
