SABIC to acquire remaining 50% of Shell venture for $820 million

The headquarters of Saudi Basic Industries Corporation (Sabic) in Riyadh. (AFP file photo)
Updated 22 January 2017
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SABIC to acquire remaining 50% of Shell venture for $820 million

ALKHOBAR: Saudi Basic Industries Corp. (SABIC) has signed an agreement to acquire the 50 percent that it does not already own in its petrochemical venture with Shell Arabia, a unit of Royal Dutch Shell, for $820 million, SABIC said on Sunday.
“As per the partnership agreement between the two companies that stipulates the right of SABIC to renew or end the partnership by the end of 2020...SABIC decided to acquire the full stake of Shell, which is 50 percent,” it said.
SABIC, one of the world’s largest petrochemical firms, said the $820 million figure was based on the net value of the venture’s assets. It said the acquisition was in line with a strategy to develop its successful investments.
The venture, known as SADAF, was established in 1980 and operates six petrochemical plants with total annual output of over 4 million tons year of chemicals. It makes products including ethylene, crude industrial ethanol and styrene at a complex in Jubail, on the Gulf coast of Saudi Arabia.
The acquisition agreement is expected to be carried out before the end of this year, SABIC said, adding that it signed another memorandum of understanding with Shell Arabia on Sunday to boost the companies’ cooperation in unspecified international and local investments.
“We will continue to explore potential future opportunities with SABIC,” Graham van’t Hoff, executive vice president of chemicals at Shell, said in an e-mailed statement to Reuters.
In 2014, SABIC and Shell shelved plans to expand SADAF as the results of feasibility studies were not encouraging. The expansion was to have added production of polyols, propylene oxide and styrene monomer.
Shell is involved in other downstream activities in Saudi Arabia; it has a crude oil refinery with Saudi Aramco in Jubail. (Reporting by Reem Shamseddine and Hadeel Al Sayegh)


Shareholders of India’s Jet Airways approve debt-for-equity swap

Updated 23 February 2019
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Shareholders of India’s Jet Airways approve debt-for-equity swap

  • The plan will mean the lenders will have a bigger holding than any other shareholder
  • Currently, Chairman Naresh Goyal owns a 51 percent stake in the company and Abu Dhabi’s Etihad Airways owns 24 percent

MUMBAI: India’s Jet Airways said late on Friday that its shareholders approved a plan to convert existing debt to equity, paving the way for the troubled company’s lenders to infuse funds and nominate directors to its board.
Jet’s board last week approved a plan by lenders, led by State Bank of India, for an equity infusion, debt restructuring and the sale or sale-and-lease-back of aircraft.
The plan will mean the lenders will have a bigger holding than any other shareholder.
Currently, Chairman Naresh Goyal owns a 51 percent stake in the company and Abu Dhabi’s Etihad Airways owns 24 percent.
Jet, which had net debt of 72.99 billion rupees ($1.03 billion) as of end-December, has debt payments looming next month, according to rating agency ICRA. It has been unable to pay pilots’ salaries and has outstanding bills to aircraft lessors.
The company, India’s biggest full-service carrier, is struggling with competition from budget rivals, high oil prices and a weaker rupee. The share price took a beating in 2018, losing nearly 70 percent of its value.
In a regulatory filing, Jet said on Friday that 98 percent of its shareholders voted to increase the share capital to 22 billion rupees ($309.8 million) from 2 billion rupees at a special meeting.
Jet, whose financial woes are set against the backdrop of wider aviation industry problems, has been in the red for four straight quarters.