Al-Tuwairqi signs SR7.5bn debt restructuring deal with banks

23/06/2011 00:00 AST

Saudi steelmaker Al-Tuwairqi Group has signed a SR7.5 billion debt restructuring deal with 18 local and international banks that would allow its subsidiary, Al-Ittefaq Steel Products Company (ISPC) to enhance and develop their core business operations.

"This consensual deal is the first of its kind in the region," Al-Hilal Al-Tuwairqi, chairman of Al-Tuwairqi Holding Company, told a press conference after the signing ceremony at the Four Seasons Hotel.

Representatives from 18 banks signed the agreement with Al-Tuwairqi.

"After two and a half years of concentrated efforts by the working group of ISPC, its shareholders and the lenders group, the debt of ISPC and the Tuwairqi group has been successfully restructured, " Al-Tuwairqi said.

According to the agreement, the entire debt of the two obligors, namely Al-Tuwairqi Holding Company and Al-Ittefaq Steel Products Company (ISPC), has been restructured into new medium-term facilities that include commercial and Islamic ventures.

Part of the new facilities will be repaid in equal quarterly installments over a period of six years, whereas the remaining amounts will be repaid as bullet at the end of the sixth year.

As part of the restructuring, certain assets of Tuwairqi Holding Company will be transferred to ISPC, including Arab Iron and Steel Company, an under-construction iron smelter with a design production capacity of circa two million tons of billets, and the Kingdom Iron and Steel Holding Company, an under-construction steel sheets factory.

Dr. Robert Eid, managing director and chief executive officer of Arab National Bank, described it as the largest restructuring deal in the region where nobody would lose a single riyal.

He said the deal allows the company to continue and expand its activities.

He said Saudi banks have taken the lion's share of Al-Tuwairqi's debts.

Apart from ANB, the banks that have signed deals with the group include Al-Rajhi, Samba, NCB, SABB, Banque Saudi Fransi, Riyad, Aljazira, Saudi Hollandi and Saudi Investment Bank.

Arab News