Aluminium Bahrain (Alba) is seeking a credit rating ahead of talks with banks about fundraising for its $3.5 billion Line 6 expansion, a company official told Reuters .
In June, Alba secured government approval for a larger-than planned expansion of its proposed sixth “potline” which will boost annual output by 514,000 tonnes to 1.45million tonnes.
The company was considering a range of options to fund the scheme, including loans, export credit agency finance and a capital markets transaction, according to three banking sources who spoke anonymously.
“We will be looking at the funding mix in conversations with our financial advisers, but no decisions have yet been made on how this important project for Alba and Bahrain will be financed,” said the anonymous official.
JP Morgan, Gulf International Bank and National Bank of Bahrain are the project’s financial advisers, according to the announcement.
Before any decisions are made, a credit rating will be sought which could take five to six weeks once started – with the rating being secured before the end of the year, the official said.Â
Getting a credit rating is often regarded as an important step before approaching capital markets, and one of the banking sources said a bond or sukuk could be issues before the end of 2015 or early in 2016, depending on the progress of funding talks with banks and on market conditions.Â
The sources and the company official did not disclose what the debt-to-equity split would be on Alba’s financing.
Construction of the project, which will make Alba the largest single-site aluminium smelter in the world, is expected to start in 2016 and production to begin in 2019.
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