The company said the transaction reflects Emirates Steel's coming of age and echoes the trust local and international banks have for the quality steelmaker.
"The facilities will be used to refinance
"As an established corporate the company has been able to significantly reduce its borrowing costs and drive the pricing down. We have also extended the loan tenor to eight years, which allows us more flexibility in managing our financial resources. This reflects Emirates Steel's coming of age and echoes the trust local and international banking institutions have in us," Al Nowais said.
He welcomed the level of interest that multinational financial institutions have shown in the deal and called it "a true endorsement by the international financial markets of what we have achieved at Emirates Steel." He further added that the transaction was concluded with no government guarantees and with more favourable terms than the 2010 facilities.
The deal, brokered by
Al Nowais pointed out that Emirates Steel is pushing ahead with its strategic ambitions to realise its expansion goals of producing integrated steel solutions utilising its highly skilled
Al Nowais, who chairs one of the most powerful industrial holding corporations in the
Emirates Steel's CEO Saeed G Al Romaithi said the financing will also support further expansion of Emirates Steel's product range: "We are now working on bringing to market several technically-challenging new products to meet the growing demands of our customers and to expand our customer base," he said. Plans by Emirates Steel are now underway to add value-added products to the range to reduce its exposure in the highly-competitive commodities markets.
"The new range of value-added products includes branded nuclear-quality steel, medium- and high-carbon wire rod and offshore grade heavy sections and sheet piles," he said. In total, the company boasts three bar mills, a wire rod mill and a structural steel mill with a combined capacity of 3.5 million tonnes a year.
Giving details about the eight-year facility, Emirates Steel's CFO
Pope pointed out that the facility attracted strong interest from the international financial markets. "The offers received reflected a four times oversubscription on very favourable terms. The fast track development of Emirates Steel meant that we have been able to refinance our project finance based loans with a corporate debt structure; realising considerable savings to the company together with an extended tenor to reduce liquidity risk.
"Further, the timing of the deal has realised real benefits; there is excess liquidity in the market and we established a competitive bidding process to minimise our costs, a strategy which will realise considerable cost savings for the company."
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