UAE’s Emal Secures $3.4bn Bank Debt

Emirates Aluminium has completed a significant portion of the $4 billion dollar fundraising to expand its smelter development, with the remaining debt to be finalised in the coming weeks, the company said in a statement to Reuters on Tuesday.

However, the statement made no reference to the bond issue that was supposed to be part of the overall funding package.

“A significant portion of the debt financing package ($3.4 billion) was successfully closed in late March with commercial banks and Islamic financiers,” the statement said.

“The remainder of the debt funding, comprising facilities from several export credit agencies (ECAs), is expected to be finalised and closed over the next several weeks,” it added.

A project bond from the company, a joint venture between Abu Dhabi’s Mubadala and Dubai Aluminium, of up to $1 billion had been expected and would have been a rare example of the debt format from the Gulf Arab region.

Sources told Reuters last October that Goldman Sachs, Citigroup and local lender Abu Dhabi Commercial Bank had been mandated to lead the trade.

The $3.4 billion bank financing was split between a $2.925 billion portion from commercial lenders and $475 million from Islamic banks, a banker working on the deal said.

The remaining cash would be split between three ECAs: $235 million from France’s Coface, $250 million from Germany’s Hermes and $100 million from the Export-Import Bank of Korea (Kexim), the source added.

In all, 22 banks joined the bank loan, which has a 16-year lifespan and pays 225 basis points over the relevant benchmark to begin with before increasing in stages to reach 300 bps, bankers told Reuters LPC in March.