IBQ, the facility agent, will provide $150 million (QR547.5 million) of the project's cost with UNB funding the remaining balance of $100 (QR365 million).
The loan facility agreement was signed on behalf of Qatar Steel by Ali Bin Hasan Al-Muraikhi, director and general manager, George Nasra, managing director of IBQ and Ala' Abu Mughli, senior vice president and country head of UNB — Qatar.
The signing ceremony was attended by Qatar Steel's managers, and high-ranking officials from both banks.
The new subordinated loan will be utilized by Qatar Steel to construct a state-of-the-art new steel melt shop with a 1.1 MTA production capacity with the recognition of much expansion work on this project has already started and going on right now.
The expected launch date is first quarter 2013, and the targeted markets are local and regional
Ali bin Hasan Al-Muraikhi, director and general manager of Qatar Steel expressed his delight at signing this loan facility agreement.
"We are very pleased to build up strategic partnerships with both IBQ and UNB, and to establish solid cooperation and business relations, and we trust that such a loan facility would enable us to expand our existing Plants, and to meet our commitments towards our customers," he said.
Al-Muraikhi said the loan facility agreement marks a significant milestone in the expansion plans and aspirations of Qatar Steel, which is a leader in the steel industry, with a current annual production capacity of 2.4 million tons of DRI/HBI, 1.9 million tons of Molten Steel, 1.8 million tons of Steel reinforcement Bars and 0.3 MTPA of Wire Rod.
George Nasra, managing director of IBQ, said: “IBQ is proud to finance one of Qatar's most important and productive projects which will undoubtedly contribute to the country's economic development. Through our unique and market-leading project financing, we are always committed to supporting Qatari companies in their long term expansion and development plans. In particular, we are pleased to be backing Qatar Steel, the market leader in the steel industry. This year IBQ has been at the forefront of a number of other financing activities for Qatari companies among which are Gulf Helicopters Co, Gulf Drilling International Limited (Q.S.C.) (GDI) and Doha Cables.”
Ala' Abu Mughli, senior vice president and country head of UNB — Qatar, said: "This is our first local financing to Qatar Steel and we hope to develop our relationship further with Qatar Steel in the future."
Abumughli added “Our support to Qatar Steel operations reflects UNB's confidence in the company's business model and further indicates the trust that the bank has in the Qatari economy".
UNB — Qatar's role in providing the term loan facility is in line with the bank's objective and strategy of actively supporting Qatar's economy.
"We are absolutely committed to support Qatar's development process and are keen on providing finance assistance to projects that contribute to economic growth and diversification," added Abu Mughli.
