Thursday 25 / April / 2024
Muscat: Octal will expand their Salalah facilities after securing financing worth $625 million from a group of Omani and international banks.
It is one of the biggest financing deals in the last decade in the Sultanate, the company confirmed.
The loan package consists of a syndicated term loan facility of US$ 225 million and working capital of US$ 400 million.
The new term loan facility has been provided by seven local and international banks, consisting of Bank Muscat, Bank Dhofar, the National Bank of Oman, Standard Chartered Bank, HSBC Bank Oman SAOG, the National Bank of Bahrain (NBB) and Bank ABC with Bank Muscat Investment Banking acting as the financial adviser for the deal.
Addleshaw Goddard Oman acted as the lenders’ legal counsel and Octal was advised by Al Busaidy, Mansoor Jamal & Co (AMJ). Bank Muscat are also acting as the documentation bank, facility agent, security agent and account bank for the transaction.
Octal’s Chief Executive Officer Nicholas Barakat said, “We are pleased by our lenders’ support, and their confidence in the high-quality of our asset base, our strong operating performance and our plans to deliver value for all stakeholders. With this momentum, we have greater flexibility to implement our strategy, underpinned by innovation, growth, and optimization.”
He added, “With the extra capital, we aim to expand our PET sheet capacity at the main plant in Salalah Free Zone, increase operational facilities, continue to develop our Research and Development activities specifically involving the manufacture of PET converted packaging in the dairy and poultry industry, and support our growing customer base.”
In a strong vote of confidence in Octal’s future, the loan facility was oversubscribed by almost 250 per cent and will continue to set Octal for stronger and rapid growth. The company’s strategy as the leading manufacturer of PET materials is to further expand its patented PET Sheet business specifically in recycling technology, process technology, and specialised industry segments such as poultry, dairy and food service packaging, with further planned geographical expansion into Latin America and Asia
Octal’s main product is its patented DPET sheet, which it developed and introduced to the market in 2008 as a cutting-edge alternative to the traditional PET sheet. The company is tapping into a global market that currently stands at 59.3 million tonnes, offering a product that is fully recyclable, clear and transparent, and the first and only direct-to-sheet polyester sheet in the world.
The unique technology eliminates five energy-intensive stages of the conventional sheet production process, meaning it offers an unmatched sustainability profile, while delivering the lowest carbon footprint compared to other PET sheet and the polymers for which DPET substitutes. DPET packaging is used for a broad spectrum of products such as trays, cups, blister packs, IT hardware items, school and office supplies, and electronics.
