EGA secures $600m revolving credit facility with UAE and international banks

The new credit facility will help the company manage its short-term working capital

An Emirates Global Aluminium employee at the company's Taweelah refinery. Aluminium production is one of the core sectors of the economy that will come under focus as part of Abu Dhabi Department of Economic Development's Basic Industries Project. Image courtesy of EGA
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Emirates Global Aluminium, the largest industrial company in the UAE outside the oil and gas sector, secured a $600 million (Dh2.2 billion) revolving credit facility with a syndicate of UAE and international lenders.

The three-year facility will be used to help the company manage its short-term capital and liquidity position. It was priced at a competitive margin and replaces uncommitted facilities supplied to it by several banks, according to a statement.

“EGA has grown into a substantial global business with operating assets on two continents and at every step of the aluminium value chain from mine to metal,” said Abdulnasser Bin Kalban, chief executive of EGA.

“This committed revolving credit facility is the next step in the evolution of our financing and balance sheet management strategy and enables a robust and structured approach to managing our short term working capital and liquidity position.”

Commercial Bank of Dubai, Emirates NBD, Mashreq and Standard Chartered acted as the joint lead arrangers and bookrunners for the deal.

A revolving credit facility is a line of credit extended by lenders which can be drawn upon at any time at the borrower’s discretion.  Revolving credit facilities are used by complex businesses to enable the efficient management of cash flow and liquidity.

In December, EGA said its new refinery at Al Taweelah produced one million tonnes of alumina since it began operations in April and is expected to reach full capacity during the first half of 2020.

The refinery converts bauxite ore into alumina, the feedstock for aluminium smelters. Once full production is achieved, the plant would meet 40 per cent of EGA’s alumina needs.

EGA invested about $3.3bn to build the Al Taweelah alumina refinery. The company also began bauxite exports from its subsidiary Guinea Alumina Corporation in August.

EGA, which is jointly owned by Abu Dhabi’s strategic investment arm, Mubadala Investment Company, and the Investment Corporation of Dubai, has more than 350 customers in about 60 countries. The majority of its sales are to customers in Southeast Asia, Europe and the US.

In 2018, the company made a profit of Dh1.2bn on revenue of Dh23.5bn.