TNI signs deal to raise Dh2.2b for Australia firm

Dubai: Abu Dhabi-based investment company The National Investor (TNI) has signed financial advisory and capital raising agreements with Australia-based Boulder Steel Ltd to raise Dh2.2 billion ($600 million).

The UAE firm will act as Boulder Steel's exclusive financial advisor, lead manager, lead arranger and book runner.

TNI will seek to raise $600 million of debt and equity for a steel mill and seamless tube plant in Queensland, Australia. The seamless tubes will be made for oil and gas companies.

A newly-established UAE-based subsidiary of Boulder Steel will undertake the seamless tube plant which consists of a steel mill and finishing line with capacities of up to 350,000 and 175,000 tonnes per annum respectively.

The finishing line in the UAE will produce up to 175,000 tonnes per annum.

Of the $600 million debt and equity, Boulder Steel expects to raise approximately $150 million through a secondary offering of its shares on the Dubai International Financial Exchange (DIFX).

Some Middle Eastern investors are keen to invest in the equity of the subsidiary directly as minority shareholders. If that happens, the amount that Boulder Steel raises through a secondary offering on the DIFX would be reduced accordingly.

Private placement

In addition, TNI is expected to raise $15 million through an equity private placement to fund the expansion of Boulder Steel's 50 per cent-owned Euro Forming Services business. TNI has already identified potential investors and due diligence is expected to commence shortly.

Peter Wallner, chairman and managing director of Boulder Steel, said, "We are excited to commence these fundraising initiatives and to move forward in the execution of Boulder Steel's long-term strategy for developing its seamless steel tube businesses."

The equity raising is expected to be completed within five months.