Emirates Steel finalises $400m refinancing deal
The Sharia-compliant structure will replace existing debt
Emirates Steel, one the UAE's largest non-oil companies, has finalised a $400 million (Dh1.46 billion) loan refinancing deal that will replace the company’s existing outstanding secured debt.
It is one of the key portfolio companies of Abu Dhabi industrial holding company Senaat. Last week, Senaat listed a $300m sukuk as part of a $3bn programme. The Islamic bond, which is dual-listed in Abu Dhabi and the London Stock Exchange, will also be used to refinance Emirates Steel's debt.
“While Emirates Steel is more than capable of meeting its current financial obligations, in the context of its long-term financial strategy, it seeks to capitalise on the current market situation by taking advantage of available financing opportunities in order to obtain low interest rates,” chief executive Saeed Al Remeithi said on Sunday.
BNP Paribas and Abu Dhabi Islamic Bank co-ordinated the arrangement of Emirates Steel’s refinancing deal. The lenders included AB Svensk Exportkredit,Citibank, First Abu Dhabi Bank, MUFG Bank, Union National Bank and BNP Paribas.
The steel company’s latest loan facility is Sharia-compliant, based on a commodity Murabaha structure.
The mechanism was the first of its kind for the regional syndicated loan market, a statement said.
In an interview with The National last week, Mr Al Remeithi said the company was eyeing expansion into Iraq as it wants to diversify into newer economies amid a cooling global market for retail.
At the listing of the $300m sukuk, he said there were “strong indications” that Emirates Steel would recourse to more such financing in 2019.
The company maintains a fairly positive outlook for domestic steel market in 2019 on the back of large projects such as the expansion of the new Al Maktoum International Airport as well as the development of refining and chemicals facilities in Ruwais by Abu Dhabi National Oil Company.
“From the rebar point of view, it will stay the same, most of the sections, will stay the same. If there are issues in the local market, we have alternatives,” he said.
Updated: December 16, 2018 02:37 PM