16 January 2007
Bahrain's steel industry received a major boost yesterday when it was announced that Arab Banking Corporation (ABC) has been mandated to underwrite a $555 million financing facility for Gulf Industrial Investment Company (GIIC).
The cash will help finance GIIC plans to more than double the output of its iron ore pelletising plant at Hidd Industrial Estate and carry out major infrastructure work.
Initially the plant will be upgraded to increase production of iron ore pellets from the current 4.6 million tons capacity to 5 million tons in a project which will cost $15 million and should be completed by the end of this year.
The company then plans to build a second pelletising plant along side the existing facility with an additional capacity of 6 million tons a year.
Two international contractors, Kobe Steel and Siemens have been short-listed for the work which will include stockyard and jetty extensions and should be completed towards the end of 2009.
In line with the massive expansion, the company has signed a 20 year contract with MMX of Brazil for the supply of 6.5 million tons of iron a year, with an option to increase this by a further 6.5 million tons in 2009.
Dr Ali Basdag, Chief Executive Officer of GIIC, said steel consumption in the Middle east has been growing at a faster pace than production, driven by a boom in infrastructure and real estate.
Growth in demand for pellets was estimated to rise by 17.5 million tons a year between 2006 and the end of 2008 and then increase by a further 10.4 million a year between 2008 and 2012.
The announcement was made at a commemorative ceremony yesterday to mark ABC's successful syndicated debt financing of $153 million for United Stainless Steel Company (USCO).
ABC was the sole underwriter and book runner of the facility which will be used to partially finance the construction and operation of a 90,000 tons per annum cold rolled stainless steel mill in the Hidd Industrial Area. USCO will be the first cold rolled stainless steel producer in the region. Production is scheduled to start in the second quarter of this year.
ABC raised the $153 million with a syndicate of regional banks but expects to have to include global banks in its efforts to raise $555 million for the GIIC expansion.
Bahrain's steel industry received a major boost yesterday when it was announced that Arab Banking Corporation (ABC) has been mandated to underwrite a $555 million financing facility for Gulf Industrial Investment Company (GIIC).
The cash will help finance GIIC plans to more than double the output of its iron ore pelletising plant at Hidd Industrial Estate and carry out major infrastructure work.
Initially the plant will be upgraded to increase production of iron ore pellets from the current 4.6 million tons capacity to 5 million tons in a project which will cost $15 million and should be completed by the end of this year.
The company then plans to build a second pelletising plant along side the existing facility with an additional capacity of 6 million tons a year.
Two international contractors, Kobe Steel and Siemens have been short-listed for the work which will include stockyard and jetty extensions and should be completed towards the end of 2009.
In line with the massive expansion, the company has signed a 20 year contract with MMX of Brazil for the supply of 6.5 million tons of iron a year, with an option to increase this by a further 6.5 million tons in 2009.
Dr Ali Basdag, Chief Executive Officer of GIIC, said steel consumption in the Middle east has been growing at a faster pace than production, driven by a boom in infrastructure and real estate.
Growth in demand for pellets was estimated to rise by 17.5 million tons a year between 2006 and the end of 2008 and then increase by a further 10.4 million a year between 2008 and 2012.
The announcement was made at a commemorative ceremony yesterday to mark ABC's successful syndicated debt financing of $153 million for United Stainless Steel Company (USCO).
ABC was the sole underwriter and book runner of the facility which will be used to partially finance the construction and operation of a 90,000 tons per annum cold rolled stainless steel mill in the Hidd Industrial Area. USCO will be the first cold rolled stainless steel producer in the region. Production is scheduled to start in the second quarter of this year.
ABC raised the $153 million with a syndicate of regional banks but expects to have to include global banks in its efforts to raise $555 million for the GIIC expansion.
By Arthur Macdonald
Bahrain Tribune 2007
