COMPANIES IPO IN 2018 FOR EMIRATES GLOBAL ALUMINIUM – CEO
Company says public listing plan will still depend on market conditions
The initial public offering of Emirates Global Aluminium, the UAE’s biggest industrial company outside the oil and gas sector, is on track for the second half of this year, as the company presses ahead to finish its $3.3 billion Al Taweelah alumina refinery project in Abu Dhabi.
“We have decided to go for the IPO in 2018. We will let you know how much and where [later],” chief executive Abdulla Kalban told a media briefing yesterday. The deal will depend on market conditions, he said.
In February, Khaldoon Al Mubarak, chief executive of Mubadala Investment Company and EGA’s chairman, said 2018 would be the year EGA goes to the market. The company is among the regional state-controlled entities planning a share float as IPOs make a comeback after a lull in the past two years.
The UAE markets, which along with their GCC peers lagged a global equities rally last year, have already seen two big-ticket deals – the listing of Emaar Development in Dubai and Adnoc’s float of its fuel and retail business on the Abu Dhabi Securities Exchange in 2017.
As the economy recovers from a three-year oil slump, more IPOs, from both the private and public sector, are expected to hit the market. EGA’s IPO plans come at a challenging time for the global aluminium industry, in the wake of US President Donald Trump’s decision to target steel and aluminium imports with tariffs of 25 and 10 per cent, respectively.
Mr Kalban, however, said EGA remained committed to the US market and would continue serving its customers there.
“It’s a good market and we have been there since 1998,” he said. “We have a very good customer base in the US and I think we will continue supplying our customers.”
EGA exported about 0.5 million tonnes of aluminium to the US in 2017. It is the third-biggest exporter to the country, after China and Russia.
Talks between the UAE and US governments on tariff issues are “progressing well”, Mr Kalban said, without giving further details. Despite potential headwinds, the company is pursuing its growth agenda, expanding operations in the UAE and abroad with an aim to secure all segments of the value chain, from a $1.4bn bauxite mine in Guinea to its Al Taweelah alumina refinery.
The alumina refinery is the first to be built in the UAE, and only the second in the region after Maaden’s production facilities in Saudi Arabia. It will refine bauxite ore into alumina, the feedstock for aluminium smelters. EGA currently imports all the alumina it uses in aluminium production.
The company, which reported a 59 per cent increase in 2017 net profit, said the overall refinery project had reached 82 per cent completion and construction on the calcination process facility was complete.
The project, which is being funded from EGA’s own balance sheet, is expected to come on stream in 2019.
Once full ramp-up is achieved, Al Taweelah is expected to produce about 2m tonnes of alumina per year, meeting 40 per cent of EGA’s alumina requirements for its two smelters in Abu Dhabi and Dubai.
EGA has already begun pre-feasibility study for phase two of the refinery project, which, if built, will double the capacity to 4m tonnes.
“We are looking at different technology and equipment. Hopefully, phase two would be much more efficient [and will be] built faster,” Mr Kalban said. The cost for the next phase has yet to be determined.