Last month, petrochemical firm Kayan said it was seeking bank financing with the help of main shareholder SABIC to cover a $2.4 billion rise in the building costs for its production complex.

On Saturday, SABIC and National Commercial Bank (NCB) — both controlled by the state — signed an agreement under which the former guaranteed a SR4.5 billion loan to Kayan from the lender.

“This (agreement) replaces the credit facilities (SABIC) signed with NCB on June, 29,” SABIC said in a statement.

It did not say how Kayan plans to raise the remaining $1.2 billion to cover the rise in its complex costs. By the end of 2009, Kayan borrowed SR22.5 billion of which it drew SR19.1 billion.

SABIC directly holds a 35 percent stake in Kayan.

Kayan Chairman Mutlaq Al-Morished has said the company would organize a loan with help from its shareholders, including SABIC, to cover the rise in the costs.

In addition to the credit facilities from NCB, SABIC obtained in June a SR3.75 billion loan from Alinma Bank, which is controlled by a state-owned fund.

Kayan plans to start full commercial operations at 15 out of 16 units before the end of 2011, Mosaed Al-Ohali, SABIC’s executive vice-president for manufacturing said in July.