Al Gharbia Pipe signs loan deal worth $185mby Paromita Dey on Feb 24, 2016
Al Gharbia Pipe Company (AGPC), a joint venture company with Senaat owning 51%, signed a loan agreement with a consortium of Japanese and Emirati banks totalling $185m.
The loan will finance the manufacturing and sales business of large diameter, high-quality sour grade steel pipes for oil and gas pipelines by AGPC, with a production capacity of up to 240,000 tonnes per year.
The co-financiers are the Japan Bank for International Cooperation (JBIC), which has committed $111m of total funds.
Sumitomo Mitsui Banking Corporation (SMBC), Mizuho Bank (Mizuho) and National Bank of Abu Dhabi (NBAD) also participated bringing the total co-financing amount to $185m. SMBC acted as financial advisor on this transaction.
The underlying pricing of the transaction represents one of the lowest costs of financing Senaat has ever achieved.
The transaction is expected to provide AGPC with stable financing for at least the next 10 years. The transaction represents the first time JBIC has provided direct funding to an industrial project in Abu Dhabi.
Commenting on the loan agreement, Eng Jamal Salem Al Dhaheri, acting CEO of Senaat, said, “This loan agreement represents a major milestone in the journey of the Al Gharbia Pipe Company. This multi-sponsor and multi-tranche deal represents Senaat’s lowest ever cost of funding, and is one of the most competitive financing schemes within Abu Dhabi’s industrial sector.”
“I would like to thank our financial partners, as well as our valued joint venture partners - JFE Steel Corporation and Marubeni-Itochu Steel Inc. The Al Gharbia Pipe Company represents a huge opportunity to enhance the UAE’s position as a steel producer as part of the government’s 2030 economic vision, and we look forward to what the future holds for Al Gharbia Pipe Company and the entire Senaat portfolio.”
Total investment in the Al Gharbia Pipe Company is expected to reach $299m (AED1.1bn).
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