Aluminium Bahrain announced on Sunday that it has successfully closed its syndicated term-loan facility. This is the first tranche in the firm’s funding of its Line 6 project.
The firm initial financing target was between US$500 million and US$750 million, but the loan was eventually increased to US$1.5 billion because of greater interest from lenders. The loan set a record as the largest corporate loan in the history of the Kingdom of Bahrain.
According to the company, the loan was financed at an interest rate of 325 basis points per annum over the London Interbank Offered Rate (LIBOR). The note is seven years in duration, payable in eight installments, and has a three-year grace period on principal payments. It is divided into two tranches – a senior unsecured loan facility of US$82 million, and a senior Sharia-compliant facility of US$618 million.
“The success of the Line 6 syndicated loan facility underscores Alba’s strong business fundamentals and the confidence the financial markets have in the Line 6 Expansion Project,” said Alba’s Chairman of the Board of Directors Shaikh Daij Bin Salman Bin Daij Al Khalifa. “We look forward to the full execution of the Line 6 project which upon completion will make Alba the largest single site smelter in the world.”
Aluminium Bahrain B.S.C., or simply Alba, is one of the largest industrial companies in the Middle East and is one of the top 10 largest aluminium producers in the world. Originally incorporated in 1968, the company is based in Bahrain and 87% of its total workforce are Bahraini nationals. It began operations in 1971 with a 120,000 metric ton annual capacity. Modernization bumped the output up to 450,000 metric tons in 1992. In the spring of 2005, Alba opened Line 5, raising output by 860,000 metric tons per year. Maximum output for the smelter is in the neighborhood of 1.2 million metric tons per year.