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.
