Abu Dhabi’s Emirates Steel Industries (ESI) is still the frontrunner to buy the Shadeed Iron & Steel (Shadeed) in Oman from the Abu Dhabi-based Al Ghaith Holdings (AGH), despite the emergence of a rival bidder.

Speaking on condition on of anonymity, a source close to the deal says that a deal has been in place between ESI and AGH since December 27 and that the Abu Dhabi-based steel manufacturer is still a firm favourite to buy the newly-constructed steel plant at Sohar Industrial Port in the Batinah region of the sultanate.

“Three consulting firms have been working on due diligence covering the technical, financial and legal aspects [of the acquisition],” the source says.  

The source declined to reveal the value of the deal, but took the opportunity to quash rumours that any agreement had stalled due to ESI finding undeclared liabilities.

“The work was completed and there were no surprises. An agreement was reached on the price and on all the commercial conditions. The lawyers have finalised the text and contracts are ready for signatures,” the source adds.

MEED reported on March 11 that an unknown Indian steel manufacturer had approached AGH regarding Shadeed. Despite steelmaker Jindal issuing a denial, rumours have persisted that an Indian company has entered into an acquisition agreement with AGH and is currently carrying out due diligence in lieu of contracts being signed in May. No one at either Jindal or AGH could be reached for comment. 

However, a source says that any non-GCC company interested in buying the 1.5 million tonnes-a-year facility could struggle to secure a gas agreement from the Oman government for an adequate supply of fuel to the plant. 

“ESI is a GCC company and the government of Abu Dhabi has outstanding relations with the government of Oman, so I don’t think gas will be a problem,” the source says. “Whether the same gas contract would be passed on to a non-GCC company, only the Omani authorities would be able to answer that.”

“If I was a non-GCC company interested [in acquiring Shadeed] and was not assured of the gas contract would I still proceed? No, I wouldn’t,” the source adds.