UAE-based largest premium aluminum producer, Emirates Global Aluminium (EGA) has refinanced $5.5 billion of corporate debt, deleveraging and improving repayment terms to reduce costs.
Further, it allows for an optimal dividend policy for shareholders in the future. According to the statement, “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 aluminum prices and EGA’s operational performance drive liquidity at the company.”
EGA’s scheduled debt repayments are reprofiled and extended by 2.5 years under the new facility, which is a senior unsecured loan. The terms include a mechanism that reduces EGA’s cost of debt by a significant amount as the company strengthens its balance sheet and reduces leverage.
“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. Achieving a $1 billion reduction in the facility during a period impacted by COVID-19 demonstrates the strength of EGA’s free-cash-flow generation.”
The transaction was well received by the market, and significantly oversubscribed by the 22 local, regional and international banks that participated in the deal.
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, as per the statement.
Furthermore, 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.