DUBAI- Omani plastics packaging manufacturer OCTAL has secured $625 million in banking facilities, it said on Tuesday, after pulling last year a planned $300 million debut bond.
The company continues to look at the bond market for future funding requirements should market conditions be favourable, its finance chief said.
OCTAL, which makes thermoplastic sheets and resin for use in packaged goods, will use part of the bank financing to refinance some of its existing debt and to fund expansion.
The facilities include a $225 million syndicated term loan and $400 million in working capital.
"This deal allows us to increase our production by almost 100,000 tonnes of sheet," Chief Financial Officer Scott Ewen said in an interview, from current production of around 250,000 tonnes.
OCTAL last year hired Citi, Credit Suisse, HSBC, and Standard Chartered to arrange a $300 million bond issue, its debut in the international debt markets.
The debt sale however was pulled in October, at a time of choppy conditions across emerging markets.
"If the bond market becomes more attractive, it's something we will still look at in terms of the next phase of expansion for OCTAL ... if the next capex lends itself to being funded by a bond," said Ewen.
"We're still watching that market and seeing what pricing is out there," he said. "At the current sort of risk factors that we would be exposed to, we think it's still too expensive."
The new $225 million loan is split into two tranches with maturities of four and a half years and seven years.
The $400 million working capital facilities, provided by a group of banks, are needed to back the import and export sides of OCTAL's business, Ewen said.
OCTAL said it contributes approximately 6.5% to Oman's non-oil exports.
Last year it reported revenue of $834 million. Ewen said he expects revenues to near $1 billion this year.
Bank Muscat, Bank Dhofar, National Bank of Oman, Standard Chartered, HSBC Bank Oman, National Bank of Bahrain and Bank ABC have provided the term loan, with Bank Muscat working as financial adviser, the company said.
(Reporting by Davide Barbuscia, editing by Louise Heavens) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: firstname.lastname@example.org))