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Mon 27 Apr 2015 04:07 PM

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Dubai's Topaz said to be close to securing $550m loan

Banking sources say Topaz Energy and Marine will use loan to refinance existing debt, fund new projects

Dubai's Topaz said to be close to securing $550m loan
René Kofod-Olsen, Chief Executive Officer, Topaz Energy and Marine. (Photo for illustrative purposes only)

Dubai-based oilfield services firm Topaz Energy and Marine is close to securing a loan worth at least $550 million to help refinance existing debt and fund new projects, banking sources said on Monday.

Emirates NBD, First Gulf Bank, Gulf International Bank, HSBC, Noor Bank and Standard Chartered will provide the loan, said three of the sources, with two adding it could be signed this week.

The company, an arm of Oman's Renaissance Services, told Reuters of its plans to borrow the money in November, with chief executive Rene Kofod-Olsen saying it had chosen investment bank Rothschild to coordinate the fundraising. It plans to use the proceeds to refinance an existing $380 million loan package at a lower interest rate and to provide cash for potential expansion, he said.

A spokesman for Topaz declined to comment on the loan. The sources spoke on condition of anonymity as the information is not public.

Many Gulf companies have refinanced existing debt over the past 18 months, taking advantage of an abundance of liquidity in the local banking sector and low interest rates to cut the cost of funding.

The pricing on Topaz's new multi-tranche loan was in the high 200 basis point range over the London interbank offered rate (Libor) for the secured five and seven-year tranches and around the high 300 basis point range over Libor for the unsecured five-year tranche, one of the sources said.

Topaz has around 100 ships that support the offshore energy business in the Caspian Sea, the Middle East and West Africa, among other areas. The company was considering the purchase of two medium-sized vessels designed for subsea work, which would be delivered in late 2016, Kofod-Olsen said in November.

The company was in the early stages of considering a share listing in London, Kofod-Olsen said at the time, having dropped plans for a $500 million flotation in 2011.

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