Emirates Steel refinances $650mn of debt with new loan, sukuk

Emirates Steel, the largest steel producer in the UAE, has refinanced $650mn of debt with a new loan and sukuk or Islamic bond, sources close to the transaction told Reuters. The company owned by Abu Dhabi’s Senaat, a state-owned investor in the emirate’s industrial sector, raised $1.3bn in credit facilities in 2014, due in 2022.

It hired BNP Paribas to coordinate a $400mn Shariah-compliant loan financing, Reuters reported in September. Last month, Emirates Steel’s parent Senaat issued a $300mn sukuk. The $1.3bn loan had been halved to $650mn via scheduled repayments since 2014.

The residual balance was settled in full with funds from the $400mn loan and the Senaat sukuk, one of the sources close to the transaction said.

The revised debt structure of Emirates Steel is currently an Islamic four-year term loan of $400mn and the parent company’s $300mn sukuk, the source said.