GHC secures $2.2bn funding for Emirates Steel
Abu Dhabi, August 1, 2010
Emirates Steel, the largest integrated steel producer in the UAE, and its ultimate parent company, General Holding Corporation (GHC), have secured a $2.2 billion financing to cover the expansion projects of Emirates Steel.
GHC, an Abu Dhabi Government-owned company, said both firms are on track to complete the financing plan associated with Emirates Steel’s expansion projects.
A strategic steel player in the Middle East, Emirates Steel is a subsidiary of GHC-owned Abu Dhabi Basic Industries Corporation (Adbic).
The company said it had closed a $500 million export credit facility on July 1 which was raised by GHC on a corporate basis and insured by SACE, an Italian group that operates in the field of export credit, credit insurance, investment protection, financial guarantees, sureties and factoring.
GHC director general Suhail M. Al Ameri, said the SACE facility attracted very strong interest from the international bank market.
“The extent of proposals received resulted in the SACE Facility being some four times oversubscribed on very favorable terms,” he added.
On the other hand, Emirates Steel too has has successfully secured project finance and working capital commitments from both conventional and Islamic institutions for facilities totaling $1.7 billion, said Al Ameri.
"The proposals received significantly exceeded the total financing requirement of the company with the transaction being almost 100 per cent oversubscribed."
The Emirates Steel’s limited recourse financing is scheduled to reach financial close by the end of August, he added.
Strategically located in the Industrial City of Abu Dhabi, 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 metric tons per annum, with capacity expected to reach 3 million metric tons in 2011 through its Dh9 billion expansion plan.-TradeArabia News Service