JEDDAH, 23 July 2007 — The Saudi Capital Market Authority (CMA) granted permission to Saudi Basic Industries Corp. (SABIC) yesterday to increase the size of its sukuk (Islamic bonds) up to SR8 billion. Earlier, the CMA issued the license to SABIC to issue sukuk on July 9 fixing the upper limit at SR5 billion, according to information available on the Saudi stock exchange (Tadawul) website yesterday.
SABIC, which reported a 45 percent increase in net profits to SR12.8 billion for the first half of 2007, launched its second sukuk earlier this month. The Shariah-compliant sukuk will be available to investors in the GCC and Saudi Arabia.
SABIC mandated HSBC Saudi Arabia Limited and Riyad Bank as lead managers and book runners for the sukuk issuance. SABIC successfully launched its first sukuk in July 2006.
Last year SABIC launched a major strategic project SABIC 2020. Its basic goal is to define the path to ambitious growth in the next 15 years, Mohamed Al-Mady, SABIC vice chairman & CEO, said in company’s annual report for 2006, which was released recently.
SABIC’s shares, however, declined yesterday by 1.76 percent to SR125.50. For the last six trading days, SABIC’s shares were in positive territory for just two days while all other days its shares were in the red.
SABIC’s shareholder’s equity increased to SR72.88 billion in 2006, compared to SR62.34 billion in 2005 and SR50.88 billion at the end of 2004. SABIC’s current assets also rose to SR60.32 billion in 2006 from SR45.64 billion in 2005 and SR35.23 billion in 2004.
SABIC has achieved tremendous growth over the years. “We anticipate continuing strong growth in all our main markets over the coming years and steadily increasing our market share in targeted sectors,” Al-Mady said.
SABIC also has embarked on a major expansion program to build its global presence and aid the development of the kind of long-term business relationships that provide the essential foundation for future prosperity. The year 2006 was another year of substantial investment in SABIC’s future.
SABIC’s affiliate Saudi European Petrochemical Company (IBN ZAHR’s) new $1 billion polypropylene-3 plant under construction in AI-Jubail, remains on course to go on line in 2008, adding 500,000 metric tons annual capacity in polypropylene.
Yanbu National Petrochemical Company (YANSAB’s) new Yanbu complex plant is also set for a 2008 startup, supplying among other products 500,000 metric tons of LLDPE, 400,000 metric tons of HDPE and 400,000 metric tons of polypropylene a year.
Eastern Petrochemical Company (SHARQ) agreed loans totaling $2.43 billion to finance its third expansion project in Al-Jubail Industrial City. The new plants are due to go on stream in 2008, producing among other things 400,000 metric tons of HDPE and 400,000 tons of LLDPE.
The Saudi Petrochemical Company (SADAF), already running the world’s single largest conventional production site at Al-Jubail, plans to build a third world-scale plant, boosting styrene production by over 60 percent, making it the world’s largest single-complex styrene producer by 2010.
The Saudi Methanol Company (AR-RAZI) is part-way through its fifth expansion project, AR-RAZI-5, due to go on stream in 2008 offering an annual capacity of 1.7 million metric tons of methanol.
SABIC also last year acquired Huntsman Petrochemicals (UK) Ltd., now renamed SABIC UK Petrochemicals, for $685 million.
This acquisition gives SABIC Europe a cracker and aromatics complex, along with a new 400,000 metric tons capacity LDPE plant, currently under construction in the UK and due to come on stream by end 2007.
US conglomerate General Electric sold its global plastics division, GE Plastics, to SABIC for $11.6 billion in May this year.
