Saudi Arabian Oil Co. (Aramco) is buying a further stake of roughly 22.5 % in Rabigh Refining and Petrochemical Co. (Petro Rabigh), the refining and petrochemical complicated positioned on Saudi Arabia’s west coast.
Aramco is buying the stake from Tokyo-based Sumitomo Chemical for $702 million, the state-owned oil big mentioned in a information launch. The 2 firms at present every personal 37.5 % of shares in Petro Rabigh, which was listed on the Saudi Trade in 2008.
Upon completion of the transaction, which is priced at $1.86 (SAR 7) per share, Aramco will change into Petro Rabigh’s largest shareholder with an fairness stake of roughly 60 %, whereas Sumitomo Chemical will retain an fairness stake of 15 %.
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The transaction, which is topic to customary closing circumstances together with regulatory approvals and different third-party approvals, is a part of a package deal of monetary measures meant to strengthen Petro Rabigh’s monetary place, Aramco mentioned.
Underneath the phrases of the share sale and buy settlement, all proceeds acquired by Sumitomo Chemical from the sale might be injected into Petro Rabigh, by way of a mechanism to be agreed with Petro Rabigh, in accordance with the discharge.
Aramco mentioned it’ll additionally present further funds to Petro Rabigh, through a mechanism additionally to be agreed, matching the $702 million from Sumitomo Chemical “to enhance Petro Rabigh’s monetary place and assist Petro Rabigh’s future technique,” bringing the combination funding quantity to $1.4 billion.
Additional, Aramco and Sumitomo Chemical have agreed to a phased waiver of shareholder loans of $750 million every, which can end in a $1.5 billion direct discount in Petro Rabigh’s liabilities.
The measures are anticipated to enhance Petro Rabigh’s steadiness sheet and money liquidity as a part of a remedial plan that the 2 firms plan to discover with Petro Rabigh, which additionally consists of initiatives to improve the refinery so as to enhance the profitability of the enterprise. The settlement additionally aligns with Aramco’s downstream enlargement and Sumitomo Chemical’s transfer away from commodity chemical compounds towards specialty chemical compounds, in accordance with the discharge.
Hussain Al Qahtani, Aramco Senior Vice President of Fuels, mentioned, “Aramco continues to establish alternatives to strengthen its downstream worth chain, safe placement of its upstream crude oil with affiliated refineries, and convert extra of its hydrocarbons into high-value supplies. By growing our shareholding, we count on to realize even nearer integration with Petro Rabigh and facilitate its turnaround technique. We stay up for constructing on our present relationship with Petro Rabigh, in alignment with our strategic targets”.
Seiji Takeuchi, Sumitomo Chemical Senior Managing Government Officer, mentioned, “Amid the evolving enterprise panorama in each the refining and petrochemical sectors, Aramco and Sumitomo Chemical have thought-about choices to search out an applicable turnaround technique for Petro Rabigh and establish an applicable framework to facilitate Petro Rabigh’s future plans. We consider this transaction, which aligns with the strategic instructions Aramco and Sumitomo Chemical are respectively pursuing, will considerably improve Petro Rabigh’s monetary place”.
To contact the writer, electronic mail rocky.teodoro@rigzone.com
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