Emirates Aluminium (Emal) will have to pay much higher rates to borrow money from banks to help finance a $4 billion smelter expansion due to the impact of the euro zone crisis on infrastructure lending in the Middle East.
Emal, a joint venture between Abu Dhabi's Mubadala and Dubai Aluminium, aims to raise about $2.8 billion via the loan. The company will also invite banks to pitch for a bond mandate at the end of September, banking sources said on Wednesday, a sign that companies are having to turn to bond investors for cash as the euro crisis makes bank loans more difficult to access.
The loan portion of the finance package, currently being studied by banks, will cost Emal more than double what it paid for financing on the first phase of the smelter.
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