Middle East's Biggest Aluminum Maker Curbs Debt Before Possible IPO
Middle East's Biggest Aluminum Maker Curbs Debt Before Possible IPO
(Bloomberg) -- Emirates Global Aluminium PJSC, the Middle East’s biggest producer of the metal, has obtained a $5.5 billion syndicated loan that replaces a larger facility.
The new seven-year loan will be used to refinance $6.5 billion of debt taken on in 2019.
“We have turned our focus to deleveraging to support EGA’s ambitions to further strengthen our balance sheet,” Chief Financial Officer Zouhir Regragui said in a statement. It would also help any plans to list the company should “our shareholders wish it,” he said.
EGA is equally owned by two sovereign wealth funds -- Investment Corp. of Dubai and Abu Dhabi’s Mubadala Investment Co. Mubadala said in April it was close to an initial public offering of the company, which may be valued around $15 billion to $20 billion.
The new loan reduces EGA’s funding costs and will “enable an optimal dividend policy in future years for shareholders,” Regragui said.
Producers of aluminum -- used in everything from beer cans to plane parts -- have been boosted by the metal’s surge this year as major economies recover from Coronavirus restrictions. Futures in London are up almost 30% to $2,555 a ton, the highest in around a decade.
EGA has smelters in Abu Dhabi and Dubai and a bauxite mine in Guinea. The company generated revenue of $5.1 billion in 2020 and made earnings before interest, taxes, depreciation and amortization of $1.1 billion.
Citigroup Inc., Dubai Islamic Bank PJSC, Emirates NBD Bank PJSC, First Abu Dhabi Bank PJSC and Natixis SA coordinated putting the loan together, EGA said. Other bookrunners included BNP Paribas SA, Mitsubishi UFJ Financial Group Inc. and Standard Chartered Plc.
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