RIYADH: Kuwait Projects Co., known as Kipco, expects to acquire Qurain Petrochemical Industries Co. this year, as S&P signals it would struggle to enhance its financial position without the deal.
Last March, the two companies signed an agreement to assess a potential merger that would create a firm with a market value of $2.7 billion, according to Bloomberg.
“In parallel with the management’s efforts to secure the necessary funding to meet our obligations and maintain our financial standing, we continue to work toward successfully closing the merger with QPIC, group senior vice president for corporate communications and investor relations said.
“With the due diligence process well underway, the merger is progressing according to the set timeline and we are confident that it will be completed before year-end,” Eman Al-Awadhi added.
This happens after the credit rating agency S&P placed Kipco on credit watch with negative implications last week.
It said that “absent a successful merger, we don’t believe that Kipco will be able to significantly improve its balance sheet, liquidity, and high leverage while maintaining a financial performance commensurate with its current credit profile.”