Manama, Bahrain: Bahrain-headquartered Arab Banking Corporation (ABC) and Bahrain’s Gulf Industrial Investment Company (GIIC) held a commemorative ceremony at the Sheraton Hotel in Bahrain for the US$525.3 million senior secured facilities and the signing of the EPC (Engineering, Procurement and Construction) contract by GIIC with Japan’s Kobe Steel Company (“Kobe”). The proceeds of the facilities will be used to finance the expansion of the company’s existing iron ore pelletizing plant production capacity by 6 million tonnes per annum, related infrastructure, and working capital.
The ceremony was attended by H.E. Dr Hassan Fakhro, the Minister of Industry and Commerce, senior management from GIC, GIIC, Kobe and ABC. Speaking on the occasion, Mr. Ghazi M. Abdul-Jawad commented, “Arab Banking Corporation was delighted to make this significant contribution to the development of GIIC and the metals industry in Bahrain, and looks forward to future mutual successes based on the bank’s close relationship with GIC, GIIC and the company’s other shareholders.”
ABC is the Sole Underwriter / Mandated Lead Arranger. Syndication of the facility at the sub-underwriting level is progressing well and is expected to close shortly. General Syndication is expected to follow and is aimed at attracting a mix of regional and international banks.
GIIC, located in the Hidd Industrial Area in the Kingdom of Bahrain, was established in 1984 and owns and operates the existing iron ore pelletizing plant with a rated capacity of around 5 million tonnes per annum. GIIC is strategically located at the centre of a sizeable and rapidly growing GCC steel industry, which requires pellets as a primary feedstock. GIIC is critical to the Middle East region as it is the only local supplier of pellets.
The project is sponsored by the Gulf Investment Corporation (GIC), which is also the largest shareholder. The project has brought together several strategic GCC private and public sector investors, namely: GIC, Qatar Steel, NIG (Kuwait), Al Kharafi Group (Kuwait) and Kuwait Foundry.
The new plant is scheduled to commence production in the third quarter of 2009.
GIIC’s target markets include Saudi Arabia, Qatar, Iran, India, Indonesia and Malaysia. The continued growth in demand for steel is the catalyst for the company’s decision to expand the existing plant capacity.