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  • 06-09-12

    UAE's Emal to pay higher rates to fund phase II

    (MENAFN) Emirates Aluminium (Emal) said phase II expansion project costs will increase due to the euro-zone debt crisis, Reuters reported. The company will have to pay much higher rates to borrow money from banks to help finance a USD4 billion smelter expansion as the euro-zone crisis casted shadow over infrastructure lending in the Middle East. Emal, a joint venture between Abu Dhabi's Mubadala and Dubai Aluminum (Dubal), seeks to secure some USD2.8 billion loan. The company also plans to issue bonds at the end of September, according to two bankers, as the euro crisis makes bank loans more difficult to access. The loan portion of the finance package will cost Emal more than double what it paid for financing on the first phase of the smelter. Pricing on the 15.5-year loan, earmarked to raise around USD2.8 billion, starts at 225 basis points and increases to 300 bps over the life of the loan, the bankers said. This is up from the 70 bps-130 bps margin Emal paid on the USD4.9 billion loan to fund the first phase in 2008.

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