Abu Dhabi-based investment firm The National Investor (TNI) has signed financial advisory and capital raising mandates with Boulder Steel Limited, an international tubular steel company based in Australia, to act as its exclusive financial advisor, lead manager, lead arranger and book runner.
TNI will seek to raise US$ 600 million of debt and equity, pending finalisation of a bankable feasibility study, for a state-of-the-art steel mill and seamless tube plant in Queensland, Australia to produce seamless tubes primarily for use in the oil and gas industries.
A newly established UAE-based subsidiary of Boulder Steel will undertake the seamless tube project which consists of a steel mill and finishing line in Queensland that will produce, respectively, up to 350,000 and 175,000 tonnes per annum, and a finishing line in the UAE that will produce up to 175,000 tonnes per annum.
Of the US$ 600 million debt and equity, Boulder Steel expects to raise approximately US$ 150 million through a secondary offering of its shares on the Dubai International Financial Exchange (DIFX).
Some Middle Eastern investors have indicated a desire to invest in the equity of the subsidiary directly as minority shareholders. If this occurs, the amount that Boulder Steel raises through a secondary offering on the DIFX would be reduced accordingly.
In addition, TNI is expected to raise US$15 million through an equity private placement to fund the expansion of Boulder Steel's 50% owned Euro Forming Services business. TNI already has identified potential investors and due diligence is expected to commence shortly.
Peter Wallner, Chairman and Managing Director of Boulder Steel, commented: "We are very grateful for the assistance and support of Mr. Abdul Rahman Falaknaz, our Dubai-based director, and those who are arranging our financing for their work in preparing, negotiating and finalising the contractual arrangements with TNI.
“We are excited to commence these fundraising initiatives and to move forward in the execution of Boulder Steel's long-term strategy for developing its seamless steel tube businesses."
It is anticipated that the equity raising will be completed within approximately five months. This time frame includes and is subject to calling a general meeting of the shareholders of Boulder Steel to approve the transaction, completion of the bankable feasibility study, a review by the Australian Foreign Investment Review Board and the necessary regulatory approvals of the Dubai Financial Services Authority for the DIFX listing.
