23 February, 2016

Senaat portfolio company Al Gharbia signs US$185 million loan agreement from Japanese and UAE banks for its manufacturing and sales business

23 February 2016, Abu Dhabi, UAEAl Gharbia Pipe Company ("AGPC"), a joint venture company 51% owned by Senaat, one of the largest industrial holding companies in the UAE, announces the signing of a loan agreement with a consortium of Japanese and Emirati banks totalling US$185 million.The loan will finance the manufacturing and sales business of large diameter, high-quality sour grade steel pipes

Senaat portfolio company Al Gharbia signs US$185 million loan agreement from Japanese and UAE banks for its manufacturing and sales business
23 February 2016, Abu Dhabi, UAE

Al Gharbia Pipe Company ("AGPC"), a joint venture company 51% owned by Senaat, one of the largest industrial holding companies in the UAE, announces the signing of a loan agreement with a consortium of Japanese and Emirati banks totalling US$185 million.

The loan will finance the manufacturing and sales business of large diameter, high-quality sour grade steel pipes for oil and gas pipelines by AGPC, with a production capacity of up to 240,000 tonnes per year.

The co-financiers are the Japan Bank for International Cooperation ("JBIC"), which has committed US$111 million of total funds. Sumitomo Mitsui Banking Corporation ("SMBC"), Mizuho Bank ("Mizuho") and National Bank of Abu Dhabi ("NBAD") also participated bringing the total co-financing amount to US$185 million. SMBC acted as financial advisor on this transaction.

The underlying pricing of the transaction represents one of the lowest costs of financing Senaat has ever achieved. The transaction is expected to provide AGPC with stable financing for at least the next 10 years. The transaction represents the first time JBIC has provided direct funding to an industrial project in Abu Dhabi.

Commenting on the loan agreement, Eng. Jamal Salem Al Dhaheri, Acting CEO of Senaat, said, "This loan agreement represents a major milestone in the journey of the Al Gharbia Pipe Company. This multi-sponsor and multi-tranche deal represents Senaat's lowest ever cost of funding, and is one of the most competitive financing schemes within Abu Dhabi's industrial sector."

"In addition to providing capital, this loan from JBIC, SMBC, Mizuho Bank of Japan and NBAD is a major show of confidence in our vision from both national and international partners. I would like to thank our financial partners, as well as our valued joint venture partners - JFE Steel Corporation and Marubeni-Itochu Steel Inc. The Al Gharbia Pipe Company represents a huge opportunity to enhance the UAE's position as a steel producer as part of the government's 2030 economic vision, and we look forward to what the future holds for Al Gharbia Pipe Company and the entire Senaat portfolio."

The UAE is a vital market for Japan's resource strategy as it has been a stable source of crude oil for more than 30 years. For Abu Dhabi, this project is first of its kind, as it is devoted for the local production of high-grade pipes with Japanese advanced steel pipe production technology.

Total investment in the Al Gharbia Pipe Company is expected to reach AED1.1 billion.

-Ends- 

Mouaffak Hajjar
Brunswick Group
Phone: +971 (0)2 2344600
Email: senaat@brunswickgroup.com

About Al Gharbia
In March 2015, Senaat and two of Japan's leading companies in the steel sector, JFE Steel Corporation and Marubeni-Itochu Steel Inc ("MISI"), established Al Gharbia Pipe Company. The joint venture is the UAE's first large-diameter, sour service capable, welded steel pipe project.

Al Gharbia will leverage JFE Steel's know-how for high-quality large-diameter welded steel pipes, MISI's sales networks and Senaat's presence and connections in Abu Dhabi.

Once fully operational in 2018, Al Gharbia's production capacity is expected to reach 240,000 tons annually of large diameter high quality sour grade steel pipes that cater to the Construction and Energy sectors in the region. Around 40% of production is planned to be exported to neighbouring markets in the GCC and greater Middle East as well as north and East Africa.

Al Gharbia plant will be built on a 200,000 sqm plot of land at Khalifa Industrial Zone Abu Dhabi (KIZAD). The total expected investment is approximately AED 1.1 billion.

About Senaat
Senaat is the UAE's largest industrial holding company, managing assets for the Government of Abu Dhabi. Senaat is fully owned by Abu Dhabi Government and has been mandated to create, optimise, promote and champion capital and power intensive assets in the United Arab Emirates. It is a key contributor to Abu Dhabi's Economic Vision 2030, which aims to diversify the Emirate's economy away from its reliance on the hydrocarbon sector by developing a strong industrial capability. Senaat thrives on the development of UAE national human capital through leadership development, job creation and knowledge transfer.

Senaat, which translates as "Industries", manages more than US$7.3 billion (AED26.8 billion) of industrial assets and employs more than 19,500 people. Senaat has invested over US$4.9 billion (AED18 billion) in the non-oil sector since 2004 and its leadership is made up mainly of Emirates nationals.

Its subsidiary companies benefit from Senaat's unique ability to source innovation, create and grow businesses and provide proactive, strategic input through to commercial productivity. Senaat aligns itself with its portfolio companies to build world-class companies:

Emirates Steel is the only integrated steel producer in the UAE and one of the largest integrated steel producers in the GCC.

NPCC is a major international contractor providing integrated onshore and offshore oil and gas fabrication, support and Engineering, Procurement and Construction services.

Arkan specialises in the manufacturing of building and construction products in the UAE.

  • Ducab

Ducab is a joint venture between the Abu Dhabi and Dubai governments and is one of the leading manufacturers of high-quality power cables and wires in the Middle East.

Agthia is one of the UAE's leading food and beverage groups with assets across the Middle East, North Africa and Turkey.

Al Foah is the largest date company in the world. It manages the process of packaging, distributing and marketing dates in Abu Dhabi to 44 different countries.

TALEX is a joint venture with Gulf Extrusions, an Al Ghurair Group company, and owns and manages the 50,000 metric tonne capacity, state-of-the-art Aluminium Extrusion plant based at Kizad.

  • Al Gharbia Pipe Company

Al Gharbia Pipe Company is a joint venture between Senaat and two of Japan's leading companies in the steel sector, JFE Steel Corporation and Marubeni-Itochu Steel Inc (MISI). It owns and manages the UAE's first sour service capable, welded steel pipe plant based at Kizad with expected capacity of 240,000 tons annually.

For further information, please visit our website: www.senaat.co

© Press Release 2016

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