Aluminium Bahrain B.S.C. (Alba) announced on Thursday that it has garnered commitments in the amount of US$1.5 billion for the commercial loan facility needed to complete the firm’s Line 6 project.
Alba is planning to become the owner of the world’s largest aluminium smelting complex, with Line 6 boosting the firm’s capacity from 540,000 metric tons per annum to 1.5 million tons per annum. According to Alba’s construction schedule, the new pot line is to begin production in early 2019.
The original amount Alba intended to borrow was between US$500 million and US$750 million, but it says interest in the project led them to raise the amount. The firm indicated that the seven-year note will consist of a US$882 million conventional tranche and a US$618 million Islamic tranche, and be paid off in eight semi-annual installments at the end of a three-year grace period. No execution date was specified, but the expected interest rate was said to be 325 basis points over the London interbank offered rate.
“We are pleased with the success of these landmark commitments, which will be the largest syndicated loan structure in the history of the Kingdom of Bahrain,” explained Alba’s Chairman of Board of Directors, Shaikh Daij Bin Salman Bin Daij Al Khalifa. “This clearly reflects the overwhelming support towards the Line 6 Expansion Project, which is one of the biggest mega projects in Bahrain and the GCC. The overwhelming demand is a testament to Alba’s solid balance sheet and the strong underlying fundamentals of the Line 6 Expansion Project.”
Alba identified Gulf International Bank B.S.C., J.P. Morgan Limited, and National Bank of Bahrain B.S.C. as global coordinators, assisting the firm in arranging the loan.
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.