Alba may increase $750m loan for Line 6

Manama : Aluminium Bahrain (Alba) has received strong support from banks for a loan to part-finance its Line 6 expansion project and may increase the amount it borrows from an original $750 million target, its chief executive said on Tuesday.

Alba will become the world’s largest single aluminium smelter complex, boosting its annual output by 540,000 tonnes to 1.5 million tonnes per year by adding a sixth “potline”, used in producing the metal from raw materials such as bauxite.

The company is raising around $3 billion to help to finance the expansion, through a mixture of loans from banks and export credit agencies and an international bond or sukuk issue. Alba reportedly had approached banks to raise a $750 million loan as the first part of this.

“We did go out to the market and we were targeting anywhere from $500m to $750m,” CEO Tim Murray said on a conference call to discuss the company’s second-quarter results.

“We had very, very good demand, so we’re finalising the terms and the conditions but we expect this to be a bit more than the $750 (million).”

A separate presentation document posted on Alba’s website said the loan should be finalised during the third quarter, as would the awarding of contracts to build Power Station 5, the 1,350 megawatt plant which will be part of the Line 6 project.

Production from the sixth potline is expected to start in early 2019. Bechtel was appointed as the contractor to oversee the expansion in April.

On Sunday, Alba reported a second-quarter net profit to 16.28m dinars ($43.16m). A two-year cost-cutting programme which aims to reduce the cost of producing aluminium by $100 per metric ton by the end of 2017, named Project Titan II, had achieved savings of $33 per metric ton by the end of the second quarter, the company’s presentation said. (Reuters)