Advanced unit obtains SIDF approval on SAR 3 bln project financing loan

Advanced Petrochemical Co. said its 85%-owned subsidiary, Advanced Polyolefins Co. (APOC), obtained a conditional approval to secure SAR 3 billion loan from Saudi Industrial Development Fund (SIDF), according to a bourse statement.

The loan, which can be disbursed until June 2025, is repayable in 16 semi-annual installments, starting July 2026, over a period of eight years.

The loan will be guaranteed by mortgage on all fixed assets of APOC to SIDF, in addition to providing corporate guarantees from the shareholders of APOC.

The loan facility will be utilized to finance the construction of propane dehydrogenation (PDH) and polypropylene (PP) plants with a nameplate capacity to manufacture 843,000 tons per annum (p.a.) of propylene and 800,000 tons p.a. of polypropylene in Jubail Industrial City.

The binding loan agreement with SIDF will be signed after completing other procedures required by SIDF. No related parties are involved in the deal.

In March 2020, Advanced announced the signing of a partnership agreement between its subsidiary, Advanced Global Investment Co. (AGIC), and SK Gas Petrochemical Pte. Ltd. (SKGP), a unit of SK Gas Co. Ltd, Argaam earlier reported.

Under the agreement, the newly-incorporated APOC, a closed joint-stock firm, will build and operate a PDH and PP complex with a design capacity of 843,000 metric tons per annum of propylene and 800,000 metric tons per annum of polypropylene in Jubail Industrial City.

The project, worth $1.8 billion (SAR 6.75 billion), will be financed by equity (25% ) and bank loans (75%). APOC expects to begin construction by 2021 and commercial operations will likely commence by H2 2024.

In October this year, Advanced signed an amendment to the partnership agreement by adding an isopropanol (IPA) plant with a capacity of 70,000 tons per annum, along with the PDH and PP plants that were already announced earlier.