RIYADH, 17 July 2006 — The Saudi Basic Industries Corporation (SABIC) entered into an agreement yesterday with BNP Paribas, Arab Banking Corporation (ABC) and Samba Financial Group as financial advisers and lead arrangers for approximately $4.8 billion loan for SABIC affiliate, Saudi Kayan.
Saudi Kayan, currently under formation, plans to construct a world scale giant petrochemical complex in Al-Jubail with an annual capacity exceeding 4 million metric tons of chemical products, some of which will be manufactured for the first time in the Kingdom of Saudi Arabia.
SABIC also signed an agreement with Samba appointing it as financial adviser and IPO manager for the Saudi Kayan Petrochemicals Company’s public subscription. The new company will offer 45 percent of its capital for public subscription, most likely in fourth quarter in 2006, after obtaining necessary approvals.
Mutlaq Al-Morished, vice president of SABIC for corporate finance signed both agreements at SABIC headquarters in Riyadh in the presence of Mohamed Al-Mady, SABIC vice chairman and CEO and Issa Al-Issa, Samba managing director and CEO.
“The new company’s capital amounts to SR12 billion Saudi. SABIC owns 35 percent of this capital while Kayan Petrochemicals Company owns 20 percent,” Al-Mady, said, adding that the remaining 45 percent shall be offered for public subscription following the approval of the competent authorities.
“The offering of this percentage is consistent with the wise policy pursued by the Saudi government to pave the way for citizens to invest in industrial projects with long-term economic viability, especially since it comes after unprecedented demand experienced by the underwriting of SABIC’s YANSAB affiliate,” said Al-Mady.
He expressed great optimism for the future of the new company, especially as it will add new specialized products into the Saudi marketplace that will be produced in Saudi Arabia for the first time. Such products include: aminoethanols, aminomethyls, dimethylformamide, choline chloride, dimethylethanol, dimethylethanolamine, ethoxylates, phenol, cumene and polycarbonate. This is in addition to ethylene, propylene, polypropylene, ethylene glycol, butene-1 and others, all of which contribute to the enrichment of the Saudi petrochemical industries, strengthening SABIC’s global competitiveness, and constitute a basis for the development of national downstream industries.
While expressing his thanks to SABIC for reposing its confidence in Samba by appointing the bank as financial adviser to the underwriting of Saudi Kayan, Al-Issa said it reflects Samba’s pioneering role in the management of many successful underwritings of other important clients in the Kingdom. He emphasized that Samba is harnessing its potentials for this promising company that would eventually contribute to supporting the national economy.