January 26, 2010 (Abu Dhabi) - Emirates Steel is finalising plans to consolidate its debt financing and intends to launch the first major Project Finance transaction for the year in the GCC in Q1 2010. Emirates Steel is looking to raise c. US$ 1.5 billion through limited recourse financing to cover the financing needs of its Phase 1 and Phase 2 expansion projects.
Emirates Steel is wholly-owned by Abu Dhabi's state-owned General Holding Corporation (GHC) through Abu Dhabi Basic Industries Corporation (ADBIC).
In Q4 2009, Emirates Steel successfully extended its US$ 700 million Bridge Loan Facility. The extension was significantly over-subscribed and added a number of additional banks to the company's lending group.
In June 2009, Emirates Steel inaugurated Phase 1 of a dual-phased expansion plan, which has transformed the company from a simple steel processor to the first fully-integrated steel manufacturer in the UAE. The completion of Phase 2 will double Emirates Steel's output capacity, and make it the only producer capable of rolling jumbo and heavy sections in the Middle East.
Emirates Steel's US$ 2.5 billion total expansion plan is currently funded by GHC equity and the company's US$ 700m Bridge Loan. Emirates Steel will now focus on arranging funding on a long-term stand-alone basis. The cornerstone of this funding will be limited-recourse Project Financing that is planned to close in the first half of 2010.
Following the success in the extension of the Bridge Loan, and based on the considerable interest expressed by local, regional and international banks, Emirates Steel is confident that a competitively-priced Project Finance structure will be established in the first half of the current year.
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About Emirates Steel:
Emirates Steel is a subsidiary of Abu Dhabi Basic Industries Corporation (ADBIC), which is wholly-owned by General Holding Corporation, an Abu Dhabi Government-owned company. Strategically located in the Industrial City of Abu Dhabi (ICAD), just 35 kilometers away from the heart of the city, Emirates Steel is the only integrated steel plant in the UAE, utilizing the latest steel manufacturing and rolling technology to produce reinforcing bar and wire rod.
Emirates Steel currently has an output capacity of 2 million tons pa, with capacity expected to reach 3 million tons in 2011 through its AED 9 billion expansion plan. The many strategic alliances that the Company is establishing with leading technology providers, coupled with its state-of-the-art facilities, will allow Emirates Steel to maintain its position at the forefront of the industrial sector.
For more information, please contact:
Amira El-Gawly
Tel: +971 (2) 6988439
amira.gawly@adbic.com
© Press Release 2010
