Around $1bn will be raised from a project bond
Emirates Aluminium, (Emal) has sent out a request to banks to finance debt of around $4bn for the development of phase two of its Taweelah aluminium plant, according to bankers close to the deal.
The financing request, sent out around 10 August, outlines plans to raise $2-2.5bn from banks, $500m from export credit agencies (ECAs), and around $1bn from an international bond issue. Banks have until 28 September to respond with financing offers for the commercial bank tranche.
Financial close is planned for before the end of the year, although bankers say this could be too aggressive and closing the deal in early 2013 is more likely.
Emirates Aluminium Taweelah plant | ||
---|---|---|
Phase 1 | Phase 2 | |
Cost ($bn) | 5.7 | 4.5 |
Production (tonnes a year) | 750,000 | 1,299,996 |
Completion date | 2009 | 2014 |
Jobs created | 2,000 | 1,000 |
Number of potlines | 2 | 1 |
Source: Emal |
A bond issue to fund the project is planned to go ahead simultaneously with the bank tranche reaching financial close. If it does, it will be a relief to the sponsors behind the project, Dubai Aluminium (Dubal) and Abu Dhabi’s Mubadala Development Company, who had to cancel plans to use a bond to fund the first phase of the Emal scheme as a result of the financial crisis.
Four ECAs are already in advanced talks to provide either direct loans, or loan insurance, to the project. The ECAs are the Export-Import Bank of Korea (Kexim), the Export-Import Bank of the US (US Exim), France’s Coface, and Germany’s Euler Hermes.
The bank tranche will have a tenor of 15.5 years and could include both conventional and Islamic tranches, according to bankers who have been invited to fund the deal.
When complete, the expansion will almost double aluminium production at the Taweelah site to 1.3 million tonnes a year and cost around $4.58bn. The Royal Bank of Scotland is financial adviser to the sponsors.
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