Third sukuk boosts SABIC expansion programme

30 April 2008 11:52  [Source: ICIS news]

DUBAI (ICIS news)--SABIC will boost its project development programme by generating around Saudi riyals (SR) 5bn ($1.33bn) from its third issue of Islamic bonds (sukuks), it said in a statement published on the Saudi stock exchange on Wednesday.

Saudi Basic Industries Corp (SABIC), which received regulatory approval for the programme on Tuesday, would issue the five-year bonds to eligible GCC investors and will begin a 10-day roadshow on 3 May. The minimum holding will be SR10,000.

The revenue generated from the sale would be used to fund SABIC's various projects in line with its strategy to increase its production capacity from 50m tonnes/year to 80m tonnes/year by 2012, it said, adding that it expected some of its projects to go on stream between 2008 and 2009.

SABIC's stake in the expansion projects varied from 50% in Ar-Razi (Saudi Methanol Co), which is building a fifth unit, and Eastern Petrochemical Co (Sharq), 55% in Yanbu National Petrochemical Co (Yansab), 70% in National Industrial Gases (GAS), 80% in Ibn Zahr (Saudi European Petrochemical Co) and 35% in Saudi Kayan Petrochemical, it said in its 2007 results.

The largest project belonged to Kayan and it was expected to start commercial production in the first half 2010. Ibn Zahr plans to build a third polypropylene plant.

SABIC’s first two sukuk issues in July 2006 and July 2007 helped it earn $800m and $2.13bn respectively.

($1 = SR3.75)

By: Abdelghani Henni
65 6780 4359

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