Saudi Arabian Mining Company (Maaden) has begun receiving responses from banks for the financing for its $10.8bn aluminium smelter project at Ras al-Zour, ahead of a deadline of 5 June.
Sources close to the deal say that some responses have already been received and the deal is expected to be significantly oversubscribed. This is despite some concern amongst international banks about the structure of the deal.
Several banks have raised concerns about the lack of a completion guarantee on the scheme and also the lack of an offtake agreement for the sale of the products from the plant.
One banker close to the project, however, says that there has already been a strong response to the financing, indicating that banks are not too concerned about these issues.
Local banks have less of an issue with the completion guarantee and offtake agreement as they have closer relationships with Maaden. As a result, the majority of the debt financing for the project is expected to come from Saudi banks.
Debt financing is split between $5bn for the aluminium smelter and $2.5bn for an aluminium rolling mill. The UK’s Standard Chartered and the local Riyad Bank are acting as financial advisers on the deal (MEED 24:5:10).