UK-based J.O. Steel Holdings PLC has announced a significant investment of $865 million to establish an integrated billet manufacturing plant in Saudi Arabia. This initiative is supported by a robust financial backing, as the company has secured a $692 million credit facility from a consortium of banks led by the Saudi British Bank (SABB).
Details of the Steel Plant
The proposed steel mill will be strategically located in Ras Al-Khair Industrial City, situated north of Jubail on the eastern coast of the Kingdom. With an impressive annual production capacity of approximately 1.8 million tons, the facility is anticipated to commence commercial production in the first quarter of 2025. This project represents a major step in enhancing the steel manufacturing capabilities within the region.
Financial Structure of the Investment
To complement the credit facility, J.O. Steel Holdings PLC plans to raise $173 million in equity through the issuance of convertible warrants. These warrants will grant holders the right to subscribe to one equity share for each warrant at a price that will be determined at a later date. The overall financial structure of the project will maintain a debt-to-equity ratio of 80:20, reflecting a strategic approach to capital investment.
Land Lease Agreement and Strategic Alignment
In September, representatives from J.O. Steel Holdings PLC are expected to finalize a land lease agreement with the Royal Commission for Jubail and Yanbu (RCJY). This investment aligns with the Saudi government’s National Steel Strategy, which seeks to bolster the production of flat steel in accordance with the objectives of Saudi Vision 2030. By establishing this facility, J.O. Steel Holdings PLC is not only contributing to local industry but also supporting the broader economic goals of the Kingdom.
