UAE-based Emirates Aluminium (Emal) has sent out invitations to banks to pitch for the role of financial adviser on the $5bn, second phase of the project, asking banks to respond by 24 February.
Emal, a joint venture between Abu Dhabi’s Mubadala Development Company and Dubai Aluminium (Dubal), will use the proceeds to fund its plan to double the capacity of the smelter project in the Khalifa Port & Industrial Zone at Taweelah.
Phase two will involve expanding the capacity of the smelter from 718,000 tonnes a year (t/y) of aluminium to about 1.5 million t/y. According to the documents sent to the banks, Emal is hoping to have the financing for phase two in place by September 2011.
Banks have been asked to submit detailed proposals of what funding sources they would access in order the raise the $5bn required for the smelter expansion.
The first phase of the Taweelah plant is now being built and is due to be completed later in 2010.
Emal secured $4.9bn in debt for the project in December 2007, although a planned $2bn bond issue never occurred because of weak market conditions.
In late 2009 the US’ Citigroup, which is advising Emal on financing for phase one, tried to help raise up to $700m through a loan backed by export credit agencies including France’s Coface, Export Import Bank of the US (US Exim) and Germany’s Hermes (MEED 16:12:09).
The $4.9bn raised in late 2007 was split between a $1.8bn 16-year bank loan priced at 70 basis points above the London interbank offered rate (Libor), a $2.8bn 6-year bridging loan at the same price and a $270m credit facility.