EGA concludes a $6.5bn corporate debt transaction, taking advantage of strong lending market conditions

Completion of $6.5 billion term loan facility strengthens EGA’s balance sheet as mega-projects set to begin production

United Arab Emirates: Emirates Global Aluminium, the largest industrial company in the United Arab Emirates outside oil and gas, today announced the successful completion of a $6.5 billion term loan facility with a group of leading global and regional banks.

The refinancing of EGA’s corporate debt optimises the aluminium giant’s capital structure by reducing the cost of debt, creating more flexibility for repayment, and aggregating debt at the EGA level.

The term loan facility amends, extends and upsizes EGA’s existing $4.9 billion term loan facility agreed in December 2015. The proceeds from the increase in facility size have been used to fully repay a $1.8 billion term loan facility extended to EGA’s subsidiary Dubai Aluminium (DUBAL).

Danny Dweik, EGA’s Chief Financial Officer, said: “This refinancing is another major step in the implementation of our capital structure strategy. Building on the previous transaction in 2015, this transaction further consolidates our debt at the EGA level, and strengthens our credit profile. Going forward, EGA will strive to further fortify its balance sheet and diversify its sources of financing.”

The $6.5 billion term loan is a senior unsecured facility with a seven-year tenor and a flexible repayment profile allowing EGA to proactively manage its leverage and cash position. 25 global and regional banks participated in this transaction.

Zouhir Regragui, EGA’s Senior Vice President for Strategy, Corporate Development and Capital Markets, said: “While our existing loans do not mature till 2021-22, we felt the current market conditions offered an excellent opportunity to proactively optimise our maturity profile. We have been pleased by the significant demand in the market for our debt, both from long-standing banking partners and new lenders. As a result, we have been able to obtain very attractive financing terms and decrease our cost of capital as we begin a transformative year, during which our strategic upstream growth projects in Abu Dhabi and Guinea will begin production.”

Andy Cairns, Head of Global Corporate Finance at First Abu Dhabi Bank, which acted as Coordinator, Bookrunner and Mandated Lead Arranger, said: “The excellent market response to this transaction recognizes the high esteem in which EGA is held by both international and regional lenders. We congratulate the EGA team on this achievement.”

Naveed Kamal, Head of Middle East & North Africa Corporate Banking for Citi, which also acted as Coordinator, Bookrunner and Mandated Lead Arranger, said: “EGA has proactively taken advantage of strong market conditions, whereby there is significant bank appetite to lend to high quality companies with robust business performance. The transaction was  oversubscribed with most banks being scaled back below their committed amounts. We value our partnership with EGA and are proud to have played a leading role in enabling EGA to secure very attractive terms for its debt.”

The institutions that acted as Coordinators, Bookrunners and Mandated Lead Arrangers were Citi, First Abu Dhabi Bank, BNP Paribas, Emirates NBD, ING and Natixis.

The Bookrunners and Mandated Lead Arrangers were Abu Dhabi Commercial Bank, Credit Agricole, Dubai Islamic Bank, Export Development Canada, Intesa Sanpaolo, Mashreqbank, MUFG, Samba, Societe Generale and Standard Chartered Bank.

Other banks that participated in the financing were Al Ahli Bank of Kuwait, Apicorp. Kuwait Finance House,  Kuwait International Bank, Mega International, National Bank of Kuwait, National Bank of Ras Al Khaimah, Sharjah Islamic Bank and State Bank of India.