Kayan has said that up to the end of March it had spent
SR35.4 billion ($9.4 billion) on the construction of the Jubail-based giant
complex, which it projects will have an annual production capacity of more than
4 million tons of petrochemical and chemical products.
"It is expected that the gross cost of the project
will rise by approximately 24 percent or around SR9 billion ($2.4
billion)," Kayan said in a statement to the Saudi bourse.
"The company is working on necessary arrangements to
obtain financing from one or several banks to cover the increase in costs and
support from the main shareholders to ensure the completion of all plants in
the complex within the fixed deadline," it said.
Kayan Chairman Mutlaq Al-Morished told Reuters the
company would organize a loan with help from its shareholders, including SABIC.
"They (the shareholders) can either guarantee the
loan for Kayan or they can borrow and pass on the funds to Kayan," he
said.
Last Monday, SABIC, which holds a 35 percent stake in
Kayan, said it had no plans for a bond issue in the medium term as it had
raised SR8.25 billion through two loans in June from state-run National
Commercial Bank and Alinma Bank. It made the announcement after delaying a
planned dollar bond in May.
"I cannot tell you if some of the funds SABIC
obtained through these two loans will go to Kayan. They may do, they may
not," Kayan Chairman Morished said.
Kayan also said in its statement it had started trial
production on Sunday at its olefins plant, which is part of the Jubail-based
complex.
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 last week.
