COMMENT
J.O Steel Holdings to invest $865m in Saudi Arabia
U
K-based J.O. Steel Holdings has secured a $692 million credit facility from a consortium of banks and financial institutions led by Saudi British Bank (SABB) to establish an
integrated billet manufacturing plant within Ras Al-Khair Industrial City in the Kingdom of Saudi Arabia. The proposed steel mill, which is expected to be built in the north of Jubail on the eastern coast of Saudi Arabia, will have an annual production capacity of approximately 1.8 million tons and is expected to go into commercial production in Q1 2025. The company will provide $173 million in equity to be
raised through convertible warrants. Each warrant will carry a right exercisable by the holder to subscribe to one equity share against each warrant at a price to be determined at a later stage, to establish the project on an overall debt-to-equity ratio of 80:20. At the time of going to press, representatives from J.O.
Steel Holdings were due to sign a land lease agreement to that effect with the Royal Commission for Jubail and Yanbu (RCJY) in September. The investment is in line with the Saudi government’s National Steel Strategy, which aims to expand Saudi flat steel production according to Saudi Vision 2030. Saudi Vision 2030 is built around three key themes: a
vibrant society, a thriving economy, and an ambitious nation (proxy for an efficient government). The roadmap outlines numerous commitments under each theme with tangible goals to be achieved in the next 5-15 years. The planned economic diversification emphasizes on the increased participation of the private sector, with its share of total GDP projected to
rise to 65% by 2030 from less than 40% at present. The reforms would focus on key non-oil sectors including manufacturing, mining, tourism, healthcare, education, and retail. In addition, the diversification is intended at the creation of job opportunities for the Kingdom’s growing workforce (approximately 50% of the population is below 25 years of age). A vital part of the plan encompasses the restructuring
of its Public Investment Fund (PIF), which is touted to become the world’s largest sovereign wealth fund post the transfer of funds from the stake sale in Arabian American Oil Company (Aramco). The government has already begun working
towards achieving its Vision 2030 with numerous transformational programs underway. Moreover, an economic council headed by the Deputy Crown Prince Mohammed bin Salman would be responsible for the implementation of the plan. J.O. Steel Holdings PLC is a steel-manufacturing holding company incorporated under the laws of the United Kingdom. It currently owns shares in various steel plants located in South Asia and Africa. Belgian industrialist Javed Opgenhaffen has a 92%
stake in the company. Opgenhaffen’s other business enterprises include textile and garment factories, steel industries, an ethanol refinery, ceramic tiles factories, and real estate and directly employ over 20,000 people. He also owns significant stakes in Bangladesh-based insurance companies and banks..
Jennifer Eagle, editor follow us on Twitter & LinkedIn @Hoist_Magazine
Hoist magazine
‘The investment is in line with the Saudi government’s National Steel Strategy, which aims to expand Saudi flat steel production according to Saudi Vision 2030’
www.hoistmagazine.com | November 2022 | 9
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