Dubai: The UAE’s biggest industrial company outside of oil and gas, Emirates Global Aluminium, has re-financed $5.5 billion debt, which will help to reduce its costs. The move will also enable an “optimal” dividend policy in coming years, the company said in a statement. It was oversubscribed by the 22 local, regional and international banks that participated in the deal.
The term loan facility reduces by $1 billion the size of EGA’s existing seven-year $6.5 billion loan facility signed in 2019, as “strong aluminium prices and EGA’s operational performance drive liquidity at the company”. The move comes as EGA prepares to go in for a stock market float, which when it happens, will create another mega listing for Abu Dhabi Securities Exchange.
The new facility, which is a senior unsecured loan, “re-profiles” EGA’s scheduled debt repayments and extends them by a further 30 months. The terms include a mechanism that delivers material reductions in the cost of debt as EGA “further strengthens its balance-sheet and reduces leverage”.
Zouhir Regragui, EGA’s Chief Financial Officer, said: “2020 was a pivot year for EGA when - after delivering upon our upstream expansion strategy - we turned our focus to deleveraging to support EGA’s ambitions to further strengthen our balance-sheet and – if our shareholders wish it – become not only the UAE’s largest non-oil industrial company but also one of this country’s largest listed companies.
"Achieving a $ 1 billion reduction in the facility during a period impacted by COVID-19 demonstrates the strength of EGA’s free cashflow generation.”