Company chief says funds will be used to refinance existing debt and to invest in new steel assets
Abu Dhabi-based Emirates Steel has announced that it has secured new credit facilities of $1.3 billion with 19 local and international banks without government guarantees.
The funds will be used to refinance existing debt and to invest in new steel assets, the Senaat unit said in a statement.
Commenting on the deal, Hussain J Al Nowais, chairman of Emirates Steel and Senaat, said: "The facilities will be used to refinance $1.1 billion worth of existing financing that was put in place in 2010 through nine banking institutions to finance our expansion projects."
He added that nearly $263 million is also being invested in acquiring quality steel assets by Emirates Steel.
Al Nowais said Emirates Steel is pushing ahead with its expansion goals of producing "UAE Made" quality steel products for global markets.
He added that the 2010 financing was put in place to finance the Phase 1 and Phase 2 expansion projects, which pushed up plant capacities in 2012 to 3.5 million tons per year. These projects are now complete and generating solid cash flows.
Emirates Steel's CEO, Saeed G Al Romaithi, said the financing will also support further expansion of the company's product range, adding: "The new range of value added products includes branded nuclear quality steel, medium and high carbon wire rod and offshore grade heavy sections and sheet piles."
The company operates three bar mills, a wire rod mill and a structural steel mill with a combined capacity of 3.5 million tons a year.