RIYADH, 5 July 2005 — Petrochemical company Saudi Basic Industries Corp. (SABIC) will issue a SR1 billion ($267 million) domestic corporate bond in the third quarter of this year, the firm said on Sunday.
“We anticipate to do it in the third quarter of this year,” Chief Finance Officer Mutlaq Al-Morished told Reuters, adding that HSBC bank was advising on issuance of the Islamic bond, or Sukuk.
The firm decided to limit the bond to the local market because of plentiful demand and liquidity domestically. “But this does not rule out that we will go out (to international markets) in the future,” Morished said.
SABIC is in the process of acquiring corporate ratings from Standard and Poor’s and Fitch, which would allow it to issue an international bond.
“The results of the rating should be out some time at the end of July, start of August,” Morished said. The firm announced in June that it planned to list on the market its newest subsidiary, YANSAB, which has paid-in capital of SR5.6 billion.
Morished said he hoped that 35 percent of shares in YANSAB would be offered in the first half of 2006. “We are going through the formality of government registration through the Ministry of Commerce and Industry and the Capital Markets Authority,” he said.
YANSAB, in the industrial city of Yanbu on the Kingdom’s west coast, plans to produce 4 million tons per year of ethylene, propylene, polyethylene and other petrochemicals.
Morished did not comment on whether SABIC planned to list any more of its subsidiaries.
SABIC, the Kingdom’s largest listed firm, plans to spend $8 billion on new projects over the next three to five years.
