Expanded group selected for smelter MLA

16 December 2005
An expanded group of banks has been appointed to join a sub-underwriting group on the $1,500 million debt package to finance the Sohar aluminium smelter. Three core mandated lead arrangers (MLAs) - ABN Amro, Citigroupand Sumitomo-Mitsui Banking Corporation- were selected in early November (MEED 4:11:05). Each committed $175 million and accepted fees of 80 basis points (bp) over Libor, in spite of having pushed for 85 bp. Citigroup is the financial adviser. The deal is due to be signed on 11 December in Muscat.

'The way the deal has been done - with such a swift move to widen the group - has left a bitter taste, but most of those invited went in anyway,' says one banker. 'The pricing is better than on deals such as Rabigh and Sharq [in Saudi Arabia], for example, and it offers diversification away from petrochemicals.'

The Sohar smelter project is a joint venture of Oman Oil Companywith 40 per cent, Abu Dhabi Water & Electricity Authority (ADWEA), also with 40 per cent, and Canada's Alcan, with 20 per cent. The US' Bechtelis carrying out the engineering, procurement and construction management (EPCM) contract (MEED 18:11:05).

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