Qatalum closes USD 2.6 billion project finance deal. On Thursday, Qatalum successfully closed a project finance package with lending institutions for the construction of the new aluminium plant in Qatar.
(Aug. 23, 2007) On Thursday, Qatalum successfully closed a project finance package with lending institutions for the construction of the new aluminium plant in Qatar.
Qatar Aluminium Limited (Qatalum) is a joint stock company owned by Qatar Petroleum and Hydro Aluminium AS, each with a 50% stake. The new smelter will be located in the Mesaieed Industrial City, south of Doha. Preparatory construction activities are already underway with first liquid metal production expected by fourth quarter 2009.
The USD 2.6 billion limited recourse financing is comprised of a USD 2,250 million commercial bank term loan facility and a USD 350 million export credit agency facility with the Norwegian Guarantee Institute for Export Credits (GIEK). The commercial bank term loan facility was joined by 30 banks and the Export Development Canada. The initial request for proposal issued by the Financial Advisor in April 2007 resulted in over USD 3.5 billion offer for underwriting commitments for the commercial bank term loan facility alone.
Upon closing the deal, Abdulla Salatt, Senior Advisor to Qatar's Deputy Premier, Minister of Energy & Industry and QP Managing Director, Chairman of Qatalum Board of Directors, said: "Qatalum is another step in our long-term strategy to diversify our energy resources. The new aluminium smelter will be a cornerstone for developing Qatar's basic industry, and will have the upside potential to develop a myriad of new downstream industries with high value-added contribution to the growth of the country's economy."
Abdulrahman Al-Shaibi, Head of QP Project Finance, Chairman of the Qatalum Finance Committee, commented: "This is a very exciting moment for QP and Hydro as the financing cost and structure have created a new benchmark for all the upcoming aluminium projects in the region. We are very proud with large number of Mandated Lead Arrangers committed to the financing combined with strong support from two Export Credit Agencies. We appreciate the level of support provided by the lending market. The level of confidence expressed by the market through this large commitment and over subscription reflect the strong credit profile of QP and Hydro and the low risk nature of the project."
Peik Norenberg, Senior Vice President Corporate Finance of Hydro, said: "This is another important milestone for the project. We are very pleased with the response this transaction has received in the market which shows a strong commitment for the sponsors, the project and the aluminium industry. We are delighted to have contributed to a very successful financing."
BNP Paribas was the financial adviser and White & Case was the legal advisor for the project.
Hydro's press contact:
Thomas Knutzen
+47 22539115
+47 90612359
Thomas.Knutzen@hydro.com
