Bankers involved in the deal tell MEED the extension will give Emirates Steel until August 2010 to raise a further $2bn in long-term project finance.

France’s Natixis is acting as adviser to the company, which is wholly owned by Abu Dhabi Basic Industries Corporation.

In an effort to secure the best terms for the loan extension, Natixis approached both the existing banking group and additional potential financiers.

An adviser to Emirates Steel says it remains unclear who will be in the new banking group.

Banks arranged the original bridge loan in May 2008. To secure the extension, Emirates Steel will have to offer 300 basis points over the London interbank offered rate (Libor), according to bankers involved in the deal.