The Kingdom of Bahrain’s Aluminium Bahrain (Alba) is planning to increase the loan amount it seeks from its financial backers for the firm’s Line 6 project. According to its CEO, strong support from banks has prompted it to ask for more than the original US$750 million contemplated at the outset.
Upon the completion of the Line 6 project, Alba’s operations will be the world’s largest aluminium smelting complex, bumping its annual output from just under one million metric tons per annum to 1.5 million tons per annum.
In order to finance the project, Alba is attempting to raise US$3 billion via traditional and Islamic loans from banks and export credit agencies, and by an international bond or sukuk issue. Reuters reported last month that representatives from the firm was negotiating with financial institutions on a US$750 million note.
“We did go out to the market and we were targeting anywhere from $500 million to $750 million,” explained CEO Tim Murray on a conference call while discussing Alba’s second-quarter results. “We had very, very good demand, so we’re finalizing the terms and the conditions but we expect this to be a bit more than the $750 (million).”
According to a document on Alba’s website, the firm plans to finalize the loan this quarter. It also anticipates awarding the construction contract to build the 1,350mW power plant that will provide electricity to Line 6.
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.