09 May 2007 10:20 [Source: ICIS news]By Prema Viswanathan
SINGAPORE (ICIS news)--Saudi Kayan Petrochemical has raised Saudi riyal (SR) 32bn ($8.5bn) through an initial public offering (IPO), which closed on Monday, a senior official from Saudi Basic Industries Corp (SABIC) said on Wednesday.
"The IPO was oversubscribed 4.7 times and raised about SR32bn," said Mutiaq Hamad Al-Morished, chief financial officer of SABIC.
Saudi Kayan, in which SABIC has a 35% stake, received approval last month from the Saudi stock market regulator to sell SR6.75bn worth of shares at SR10 each, respresenting 45% of the company's share capital. Kayan Petrochemical holds the remaining 20% stake in the company.
Asked why the IPO had done so well despite the poor performance of Saudi Arabia's stock index in recent months, Al-Morished said, "It is because the developer of the project is SABIC, a company with a high standing."
The Saudi Arabian stock market has been volatile, plunging more than 50% in 2006. The market has fallen around 8% this year, despite solid earnings from companies such as SABIC.
Saudi Kayan is to build a 1.3m tonne/year ethane-butane mixed feed cracker in Al-Jubail, the first of its kind in Saudi Arabia, and it will produce more than 4m tonnes/year of diversified chemicals. The project was on track to keep to its start-up date of 2009, Al-Morished said.
The complex will annually produce 100,000 tonnes of ethanolamines, 50,000 tonnes of dimethyl formamide, 40,000 tonnes of ethoxylates, 20,000 tonnes of choline chloride and 40,000 tonnes of acetone, a source close to the company had told ICIS news earlier this year.
The phenol plant will receive 100,000 tonnes/year of propylene feedstock from the cracker.
The complex will also include a 530,000 tonne/year monoethylene glycol (MEG) plant.
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