ADIB inks $1.1bn Emirates Steel finance deal
Abu Dhabi, September 6, 2010
Abu Dhabi Islamic Bank (ADIB) said it has arranged a Dh4 billion ($1.1 billion) Islamic finance facility, the largest project finance deal in the UAE, for Emirates Steel Industries (ESI), the UAE’s leading steel maker, to help its expansion project.
A top-tier Islamic financial services group, ADIB said it had anchored the facility with an Dh920 million funding, the largest participation.
ESI is a subsidiary of the Abu Dhabi Basic Industries Corporation (ADBIC), wholly-owned by General Holding Corporation, an Abu Dhabi government-owned company.
The steel giant had sought the facility to expand its production capacity and diversify its product offering as part of a strategic plan to become one of the largest integrated steel manufacturers in the region, in line with Abu Dhabi’s vision 2030, said an ADIB statement.
ESI has an output capacity of 2 million metric tons per annum, which is expected to reach 3 million metric tons in 2011 as part of its ambitious expansion plan.
ADIB played a pivotal role in the facility, acting as Islamic Arranger, and Islamic Documentation and Coordinating Bank, in addition to the Islamic Facility Agent, said a top official.
Commenting on the agreement, Tirad Mahmoud, CEO of ADIB said, 'With this deal, ADIB has acted on its mandate to contribute to the UAE’s growth and development by ensuring that the financing needs of UAE corporations and other entities are met.'
'There are various reasons this is a very important deal for the UAE, the key one being that it is for the expansion of a strategic project of national importance. It will create additional employment opportunities and revenue sources for the UAE,' Mahmoud noted.
' In addition, this deal signals that the financing environment in Abu Dhabi is improving and could grow this year,' he added.
'This also shows ADIB’s unique capabilities to structure and arrange large and complex financing for major projects such as Emirates Steel Industries’ expansion, with co-participation of Islamic and Conventional financiers to achieve an optimal outcome for the client,' he said.
Highlighting the key role played by ADIB in structuring the deal, Stephen Pope, CFO of Emirates Steel Industries, said: 'ADIB impressed us with their innovation and flexibility in structuring this large financing agreement.'
'They were initially chosen due to their robust financial strength, commitment and experience in customizing financing for many UAE companies,' Pope stated.
'We are pleased to note that their efforts and capabilities, that involved structuring this complex agreement with eight other banks in a dual-tranche Islamic and Conventional Facility, have justified our confidence in them,' he added.-TradeArabia News Service