Aluminium Bahrain B.S.C. (Alba), the world’s largest smelter ex-China, is the first Bahraini Company to have successfully achieved sustainability-linked refinancing for its US$1,247,475,000 Syndicated Loan Facility in connection to the Line 6 Expansion Project.
The US$1,247,475,000 senior-unsecured Conventional and Islamic Facility carries an interest margin of 235 basis points per annum over the sum of Secured Overnight Financing Rate (SOFR) and the Credit Adjustment Spread (CAS). This new facility has an 8-year tenor and the principal amount will be repaid in 16 semi-annual instalments. The margin is subject to an adjustment (upwards or downwards) on an annual basis by an aggregate amount of up to 2.5 basis point tied to three sustainability-linked key performance indicators: Total Waste Recycled (Solid Waste), Training Hours and Lost Time Injury Frequency’s Incident Count. This facility comprises two tranches: a US Dollar-denominated senior unsecured conventional term-loan facility (the Conventional Facility) of US$537,475,000 and a US Dollar-denominated senior Shari’ah-compliant facility (the Islamic Facility) of US$710,000,000.
Arab Banking Corporation B.S.C. (Bank ABC), Gulf International Bank B.S.C. (GIB) and National Bank of Bahrain B.S.C. (NBB) were the Coordinators and Underwriters of this transaction with NBB and Standard Chartered Bank serving as joint Environment, Social and Governance (ESG) Coordinators.
Commenting on this occasion, Alba’s Chairman of the Board of Directors Shaikh Daij bin Salman bin Daij Al Khalifa said:
“The oversubscription in the refinancing of our existing syndicated loan facility by 3 times is a vote of trust in Alba, its fundamentals as well as the Kingdom of Bahrain. We are also equally pleased with the favourable terms of the new syndicated loan facility as we have dropped the interest margin from 300 basis points over LIBOR to 235 basis points over SOFR and CAS. Locking these new terms will allow us to invest in our future growth initiatives all the while giving back to our shareholders.
Being the first Company in Bahrain to have tied the refinancing to Sustainability linked targets shows our strong commitment to ESG and will be a catalyst to make Alba’s sustainability performance stronger as we work collectively to meet Bahrain’s Net Zero Carbon Objectives by 2060.
I also take the opportunity to thank the coordinators and underwriters for going above and beyond to effect the refinancing along with my Management team in Alba.”
Bank ABC’s Group Chief Executive Officer, Dr. Khaled Kawan, stated:
“Bank ABC is honoured to have been entrusted by Alba to act as Joint Coordinator, IMLAB and Underwriter for their debut, sustainability-linked term facility. This high-profile transaction exemplifies our role as a catalyst in accelerating the environmental transition in our own home market.
We are leveraging the power of our size and the capital markets to mobilize the financing Alba needs to address these global challenges and opportunities. The positive response this facility has received in terms of oversubscription, pricing, and the number and diversity of participants, is indeed a testament to Alba’s outstanding credentials and the confidence in Bahrain’s economy.”
The Chief Executive Officer of GIB, Jamal Al Kishi, stated:
“We are delighted to have had the opportunity to support Alba on this landmark refinancing, which underscores the Company’s commitment to sustainable development and growth. Investors who took up the offering have indeed expressed a strong vote of confidence in Alba and its future, and just as importantly underscored the robust appetite they have for ESG-linked exposures. GIB itself recently became the first Bahrain-Headquartered bank and the first majority Saudi-owned bank to issue a sustainably-linked syndicated loan. Helping our clients in the region with solutions aimed at achieving world-class sustainability objectives is a core focus of ours.”
“The National Bank of Bahrain is pleased to have been appointed as the Joint Sustainability Coordinator, Initial Mandate Lead Arranger and Bookrunner on Alba’s sustainability-linked term facility. We are also delighted to see that the transaction has achieved all the objectives set by Alba at the beginning of the mandate and, at the same time, attracted substantial oversubscription from a wide range of lenders. The fact that this financing brings together Alba, and NBB, respectively Bahrain’s first and second ranked Bahrain Bourse companies in terms of ESG (according to rating agency ESG Invest) is a testimony of the sustainability drive within the Kingdom. As a national enabler, we are proud to take part in furthering the Kingdom’s Economic Vision 2030,” said Hisham Al Kurdi, Chief Executive – Corporate Institutional & Investment Banking at National Bank of Bahrain.
The new syndication was oversubscribed by US$2.6 billion and comprises 21 banks.
About Aluminium Bahrain B.S.C. (Alba)
Starting as a 120,000 tonnes per annum smelter in 1971, Alba, today, is the world’s largest aluminium smelter ex-China with a production of more than 1.561 million metric tonnes per annum (2021). Its diverse product portfolio of Standard and Value-Added Products (VAP)s are exported to more than 240 global customers through its sales offices in Europe (Zurich), Asia (Hong Kong & Singapore) and subsidiary office in the U.S. Alba is dual listed on Bahrain Bourse and London Stock Exchange and its shareholders are Bahrain Mumtalakat Holding Company B.S.C. © (69.38%), SABIC Industrial Investments Company (SIIC) (20.62%) and General Public (10%).
Over the last five decades, Alba has been a major contributor to the social, industrial, and economic development of the Kingdom of Bahrain. The Company is at the heart of a thriving Bahrain’s aluminium sector, which accounts for approximately 12% of the country's GDP. Renowned for being an employer of choice, Alba is a model in Employee Training and Development and employs over 3,100 people across its operations (2021), of which 84% are Bahraini nationals. It is noteworthy that in 2021, Alba achieved more than 581,000 training- hours despite the challenges of COVID-19.
Alba is recognised as one of the top industrial companies in the world with high standards in Environment practices, Social contribution and Corporate Governance. Over 50 years, the Company has invested into projects that had a positive impact on the society in which it operates. More recently, Alba’s US$37.5 million zero-waste Spent Pot Lining Treatment Plant, the upcoming 5-plus MW Solar Farm Project and strategic role in the future Aluminium Downstream Park are a testimony of Alba’s Sustainability Roadmap that will meet the goals of Bahrain’s Economic Vision 2030 as well as the Net Zero Carbon targets led by HRH the Crown Prince and Prime Minister of Bahrain in COP26 summit. In addition, globally-recognised certifications such as ISO 9001, ISO 14001, ISO 27001, ISO 45001, IATF 16949:2016 and ASI Performance Standard Certification and Ecovadis attest to Alba’s actions to produce aluminium responsibly and sustainably.
Safety of its employees and contractors’ workforce remains Alba’s top priority. Over the years, the Company has maintained an excellent track record in Safety and Health for which it has won prestigious international awards such as the RoSPA Gold Award (9 years in a row) and International Safety Award with Merit from British Safety Council in 2020. Alba stayed strong on its journey of Safety Excellence by topping more than 25 million safe working-hours without any Lost Time Injury (LTI) by XX 2022.
Alba has also been recognised internationally for its strong values and operating excellence, with the most recent ones being top ESG performer in Bahrain by ESG Invest; Safeguard Label from Bureau Veritas; and Best Corporate Governance Award by Ethical Boardroom. For more information on Alba, please visit www.albasmelter.com
Alba External Grievance Mechanism
Alba’s External Grievance Mechanism receives and facilitates the resolution of any affected communities’ concerns and grievances about Alba’s Environment and Social (E&S) performance. External grievances about Alba’s E&S performance can be logged via the Alba Integrity Line - an independently operated confidential reporting hotline in multiple languages - via a toll-free phone system or via the intranet 24 hours a day.
Alba Response to COVID-19 Pandemic
Alba’s response strategy to COVID-19 was initiated back to January 2020 in line with the guidelines of Bahrain National Taskforce for Combating Coronavirus (COVID-19). The Company was able to maintain safe operations throughout 2021 thanks to its nimble workforce – employees and contractors’ personnel.
LINE 6 EXPANSION PROJECT MILESTONES
POWER EXPANSION PROJECT - 2018
Energisation of 33KV Substation 30 May
Energisation of 220 KV Substation 30 September
Alba Gas Station Handover 15 October
Rectifier Energisation 25 October
First Fire of Gas Turbine – Unit 1 30 October
Complete Rectifier Short Circuit Test 03 November
POWER EXPANSION PROJECT - 2019
Commercial Operation Date 1 25 August
Commercial Operation Date 2 26 October
LINE 6 SMELTER - 2018
First Cathode Sealing Operation 31 January
Handover of 1st 36 Pots in Potroom F to operations 25 November
Handover of 1st 36 Pots in Potroom F to operations 25 November
Start Short Circuit Test 26 November
Start Anode Bake Furnace Dry-Out 28 November
First Pot Energisation 13 December
First Green Anode 15 December
First Cold Charge of Furnace 3 in Casthouse 4 26 December
LINE 6 SMELTER - 2019
Successful testing of 40 pots 16 February
Started operations of 106 pots 26 March
Started operations of additional 106 pots 18 April
Start Short Circuit Test (southern 212 pots) 31 May
Safe Start-Up of the last pot (#424) 21 July
Last Hot Metal 31 July
For further details, please contact:
Director, Investor Relations, Insurance & Corporate Secretary
Investor Relations Department
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