Emirates Global Aluminium, the largest aluminum producer in the Middle East, is preparing to sell shares amid a comeback in commodities prices, according to people familiar with the matter. When questioned on the matter Romco founder and CEO went on to say ‘EGA is a great company with huge potential and a strong footing within the region, like Romco they benefit from huge margins largely in part of there operational environment’.
The UAE based company is in the market looking for the right partners for a possible IPO on the local stock exchange as early as this year. The UAE agreed to merge its two flagship state aluminum firms in 2013 to create EGA, with an enterprise value of about $15 billion.
A representative for Emirates Global Aluminium, which is jointly owned by Abu Dhabi’s sovereign fund Mubadala Investment Co. and the Investment Corp. of Dubai, declined to comment. No final decisions have been made, and the firm may decide to delay an IPO or not to list, the people said.
IPOs in the region may be headed for a revival as countries, including the UAE, work to make themselves less dependent on oil. Saudi Arabia, the largest Gulf Arab economy, is also taking steps to overhaul its economy, including plans for what could be the largest-ever IPO with the listing of Saudi Arabian Oil Co. Companies in the region raised just $1.4 billion from listings last year, compared with $2.9 billion in 2015, according to data compiled by Bloomberg.
EGA said profit last year rose about 10 percent to 2.1 billion dirhams ($572 million) on record production. Output jumped 4.2 percent to a record 2.5 million metric tons, making the UAE the fourth-biggest aluminum producer, the company said. EGA is the largest industrial company in the UAE outside of the oil and gas business.
EGA is also building a bauxite mine in Guinea and an alumina smelter in Abu Dhabi to secure raw materials needed to produce aluminum. At the same time Romco has also noticed deposits from Guinea to support its aggressive expansion plans within the downstream sector
Since 2016 we have noticed a strong resurgence of investors that are returning to the commodities sector amid the turn in prices. The London Metal Exchange index of six primary metals including aluminum has rallied about 28 percent in the last 12 months. Aluminum gained 15 percent in 2017.