EGA refinances $5.5 billion corporate facility to optimise capital structure

Emirates Global Aluminium (EGA) has successfully refinanced $5.5 billion of corporate debt, deleveraging and improving repayment terms to reduce costs and enable an optimal dividend policy in future years for shareholders.

The term loan facility reduces by $1 billion the size of EGA’s existing seven-year $6.5 billion loan facility signed in 2019, as strong aluminium prices and EGA’s operational performance drive liquidity at the company.

The new facility, which is a senior unsecured loan, reprofiles EGA’s scheduled debt repayments and extends them by 2.5 years. The terms include a mechanism that delivers material reductions in the cost of debt to EGA as the company further strengthens its balance sheet and reduces leverage.

The transaction was well received by the market, and significantly oversubscribed by the 22 local, regional and international banks that participated in the deal.

Zouhir Regragui, EGA’s Chief Financial Officer, said, “2020 was a pivot year for EGA when, after delivering upon our upstream expansion strategy by completing our investments in bauxite and alumina, we have turned our focus to deleveraging to support EGA’s ambitions to further strengthen our balance sheet and - if our shareholders wish it - become not only the UAE’s largest non-oil industrial company but also one of this country’s largest listed companies.”

The institutions that acted as coordinators, bookrunners and mandated lead arrangers were Citi, Dubai Islamic Bank, Emirates NBD, First Abu Dhabi Bank, and Natixis

The other bookrunners and mandated lead arrangers were Abu Dhabi Commercial Bank, BNP Paribas, Export Development Canada, ING, Intesa Sanpaolo, MUFG, Societe Generale, and Standard Chartered.

Other banks that participated in the financing were Al Ahli Bank of Kuwait, Arab Petroleum Investments Corporation, Commercial Bank of Dubai, Kuwait Finance House, Mashreq Bank, National Bank of Kuwait, National Bank of Ras Al Khaimah, Sharjah Islamic Bank and State Bank of India.

First Abu Dhabi Bank acted as Global Agent and Conventional Facility Agent, and Dubai Islamic Bank acted as an Islamic Facility Agent for the transaction.

Emirates Global Aluminium (EGA) on Monday announced that its Jebel Ali smelter has received certification from the Aluminium Stewardship Initiative (ASI) for its strong environmental and social performance, and governance - together known as ESG.

EGA was the first Middle East-headquartered company to join ASI, the leading global authority on ESG performance for the aluminium industry, in 2017. EGA also became the first Middle East company to achieve an ASI certification for its Al Taweelah smelter in 2019.

Speaking on the occasion, Abdulnasser Bin Kalban, EGA Chief Executive Officer, said, “We are proud to again receive ASI’s esteemed stamp of approval with the certification of our Jebel Ali smelter.

This ASI certification is a direct consequence of EGA’s steadfast commitment to improving our ESG performance and the overall sustainability of our business to ensure resilience into the future.

“At EGA, we believe it is not enough to produce the metal that makes modern life possible and is integral to building a more sustainable future. It also matters how responsibly and sustainably our aluminium metal is made. Strong ESG performance is, first and foremost, good and necessary for our world, for the societies in which we operate, and for our people,” added Bin Kalban.

Fiona Solomon, Chief Executive Officer at ASI, said, “We warmly congratulate EGA on achieving this certification for their Jebel Ali operations.

“Having already certified its Al Taweelah smelting operations in 2019, the first in the Gulf region to do so, both of the company’s smelting operations are now ASI Performance Standard certified. Their ongoing commitment to ASI Certification further underscores the company’s strong commitment to sustainability principles more broadly.”

Meanwhile the Emirates Global Aluminium earlier this month has signed an agreement with Gulf Extrusions for the supply of an industrial by-product for use in the Abu Dhabi company’s production process as it seeks to boost its efficiency.

Gulf Extrusions, a subsidiary of the Al Ghurair Group, will supply EGA with about 450 tonnes of spent caustic soda from its Abu Dhabi and Dubai extrusion plants each month for use in alumina refining.

The move will eliminate the need for new raw materials, boost efficiency and benefit the environment, EGA said on Sunday. It will also help the aluminium manufacturer make use of waste products as feedstock through its collaboration with other industries.