05 April 2004 13:18 [Source: ICIS news]
LONDON (CNI)--Advanced talks are underway with a replacement investor which may take a stake of 20% or more in the Oman Polypropylene (OPP) joint venture, CNI learned Monday.
OPP chief executive Mohammed Benayoune said the final stage negotiations involved participation on an investor-only basis, although the unidentified firm has operating and marketing experience.
A new investor in the joint venture was sought after 20% stakeholder ABB Lummus Global pulled out of the joint venture in December, leaving its partners Oman Oil Co (60%) and South Korea’s LG International Corp (20%). The ABB group was having a number of wider difficulties at the time, prompting its departure from the project.
Both ABB and LG International (LGI) were also to have undertaken the engineering, procurement and construction (EPC) contract for the 340 000 tonne/year plant , but the South Korean group has taken over the job in its entirety.
Benayoune said the EPC contract was valued at around $170m (Euro140m). Work remains scheduled to start on 1 May and the plant is to due to start operations on 1 September 2006 – a timetable dictated by the adjacent refinery coming onstream.
The PP plant is being project financed through the stand-alone joint venture company on a 70:30 debt-equity basis, it was confirmed.
OPP began the process of raising debt finance on the commercial markets in mid-March and the deadline for offers is the third week in April. A month later, OPP expects to close the financing round, CNI was told.
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