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UK-based steel manufacturer J.O. Steel Holdings will invest $865 million to build an integrated billet manufacturing plant in Ras Al-Khair Industrial City, Saudi Arabia.
The company has secured a $692 million credit facility from a consortium of banks and financial institutions, led by Saudi British Bank, it said in a press statement.
J.O. Steel will provide $173 million in equity to be raised through convertible warrants to establish the project on an overall debt-to-equity ratio of 80:20.
The statement said that the proposed steel mill, north of Jubail, will have an annual production capacity of nearly 1.8 million tonnes.
The plant is expected to go into commercial production in the first quarter of 2025.
J.O. Steel Holdings is planning to sign a land lease agreement with the Royal Commission for Jubail and Yanbu in September, the statement noted.
In July, the Arabic language daily Almadina reported that steel prices in the Kingdom had increased by at least 15 percent in the first quarter of 2021 and continued to rise in the second quarter after a surge in domestic demand due to an upturn in construction activity.
(Writing by Senthil Palanisamy; Editing by Anoop Menon)
