International news agency Reuters reported yesterday that, according to sources with knowledge of the situation, Emirates Global Aluminium has chosen Merrill Lynch Wealth Management, The Goldman Sachs Group, Inc., and JP Morgan Chase & Co. to advise it on a coming initial public offering (IPO).
When contacted by Reuters, representatives from the banks in question offered no comment on the report.
According to one source Emirates Global Aluminium’s earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled at least US$1.5 billion, putting it in the ranks of Norsk Hydro. Hydro’s current forward looking enterprise value-EBITDA multiple is 6.1 at the present time.
Emirates Global Aluminium is in a strong position with investors after turning in a ten-percent jump in its profits last year, netting US$572 million for the year. Production was up last year as well, rising by 4.2 percent to a record 2.5 million metric tons and catapulting the company into the world’s fourth-biggest producer of aluminium.
Based in Abu Dhabi, United Arab Emirates, Emirates Global Aluminium is an aluminium conglomerate created by the merger between Dubai Aluminium (DUBAL) and Emirates Aluminium (EMAL) in 2013. EGA had an estimated enterprise value of US$15 billion at the time the merger took place. The firm is owned equally by Mubadala Development Company of Abu Dhabi and Investment Corporation of Dubai. Emirates Global Aluminium holds interests in bauxite/alumina and primary aluminium smelting.
The firm’s operation at Jebel Ali, which is made up of a 1 million metric ton per annum smelter, a 2,350 mW power station, and associated facilities, is among the largest single-site primary aluminium smelters on Earth. It has a yearly production of aluminium of 2.4 million metric tons and supplies primary aluminium to 300 customers in over sixty countries, making it one of the five largest primary aluminium producers in the world.