Emirates Steel set to go to market

Emirates Steel is borrowing money so it can ramp up production.

Emirates Steel is about to launch one of the GCC’s biggest fundraising efforts so far this year.

The company is looking to raise US $1.5 billion through limited recourse financing to cover the cost of its Phase 1 and Phase 2 expansion projects.

Emirates Steel currently has an output capacity of two million tonnes per annum, with capacity expected to reach three million tonnes in 2011 through an AED 9 billion expansion plan.

Emirates Steel is wholly-owned by Abu Dhabi’s state-owned General Holding Corporation (GHC) through Abu Dhabi Basic Industries Corporation (ADBIC).

In Q4 2009, Emirates Steel successfully extended a US $700 million bridge loan facility. The extension was over-subscribed and added a number of additional banks to the company’s lending group.

Emirates Steel’s AED 9 billion expansion is currently funded by GHC equity and the US $700 million bridge loan. Its latest money raising effort focuses on arranging funding on a long-term standalone basis.

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