Abu Dhabi based Emirates Steel, a Senaat company, yesterday announced that it has secured new credit facilities of US$ 1.3 billion (almost AED 5 billion) with 19 local and international banks without government guarantees.
The transaction reflects Emirates Steel s coming of age and echoes the trust local and international banks have for the quality steelmaker.
Commenting on the deal, the Chairman of Emirates Steel and Senaat, Hussain J Al Nowais, said, “The facilities will be used to refinance US$1.1 billion worth of existing financing that was put in place in 2010 through nine banking institutions to finance our expansion projects.” He added that nearly US$263 million is being invested in acquiring quality steel assets by Emirates Steel. “A true endorsement by the international financial markets of what we have achieved at Emirates Steel. The transaction was concluded with no government guarantees and with more favourable terms than the 2010 facilities.” The deal, which was brokered by France s BNP Paribas, was four times oversubscribed.
Al Nowais pointed out that Emirates Steel is pushing ahead with its strategic ambitions to realise its expansion goals of producing integrated steel solutions utilising highly skilled U.A.E. national employees and producing steel to international standards. The objective, he said, is to supply the global markets with “U.A.E. Made” quality steel products.
He added that the 2010 financing was put in place to finance the Phase 1 and Phase 2 expansion projects, which pushed up plant capacities in 2012 to 3.5 million tons per year. These projects are now complete and generating solid cash flows.
Al Nowais explained, “The deal will allow us to consolidate Senaat s steelmaking assets under Emirates Steel, which was set up in 1998 at a cost of US$ 3 billion to provide integrated solutions in steelmaking and to support local downstream industries in line with Economic Vision 2030.
Emirates Steel s CEO, Saeed G Al Romaithi, said the financing will also support further expansion of Emirates Steel s product range, saying, “The new range of value added products includes branded nuclear quality steel, medium and high carbon wire rod and offshore grade heavy sections and sheet piles.” The company operates three bar mills, a wire rod mill and a structural steel mill with a combined capacity of 3.5 million tons a year.
Giving details about the eight-year credit facility, Emirates Steel s CFO, Stephen J. Pope, explained that it consists of a $242.5 million Islamic term facility with U.A.E.-based Abu Dhabi Islamic Bank (ADIB), Al Hilal Bank and Dubai Islamic Bank (DIB) together with a $1,057.5 million conventional term facility funded by Abu Dhabi Commercial Bank (ADCB), Al Khaliji, Arab Bank, Arab Banking Corporation (ABC), Bank of Tokyo Mitsubishi, BNP Paribas, Citi, Credit Agricole CIB, First Gulf Bank (FGB), National Bank of Abu Dhabi (NBAD), Natixis, Royal Bank of Scotland (RBS), Societe Generale, Unicredit and Union National Bank (UNB). Dentons acted as legal counsel to Emirates Steel and White and Case LLP acted as legal counsel to the lenders.
Source : WAM News Agency for United Arab Emirates