Advanced in talks with local banks for $1.2 bln loan to finance Jubail project: report

Logo of Advanced Petrochemical Co.

Advanced Petrochemical Co. is in talks with local bank to secure a loan for Jubail project, CNBC Arabia reported, citing unnamed sources with knowledge of the matter. 

Banks will provide nearly $1.2 billion finance for the project, while the remaining value will be financed by the Saudi Industrial Development Fund (SIDF) and liquidity by shareholders. The project will be 70% financed through debt, the sources said. 
 

The company asked banks to defer the repayment of 10% of the loan if market prices declined going forward after repayment of the principal loan.

Banque Saudi Fransi (BSF) was selected by Advanced to act as the loan arranger and advisor, while White & Case will act as the deal legal advisor.

Last April, Advanced subsidiary, Advanced Global Investment Co. (AGIC), signed engineering, procurement and construction (EPC) contracts for the construction of propylene and polypropylene plants in Jubail Industrial City II, Argaam reported.

Moreover, Advanced Board Chairman, Khalifa Al Mulhem had earlier said the petrochemical company will finance the construction of its propylene and polypropylene plants in Jubail Industrial City II, through SAR 7 billion loans from the Saudi Industrial Development Fund (SIDF) and other local banks.

The company obtained the approval of SIDF to raise SAR 3 billion loan and partially finance this project, in addition to another loan from local banks, which are ready to finance the project. Banks’ contribution to this funding will reach up to SAR 4 billion.