Banks launch $1.56bn financing for Jurong Aromatics project

14 September 2010 13:00  [Source: ICIS news]

SINGAPORE (ICIS)--ING and Royal Bank of Scotland (RBS) have launched $1.56bn (€1.11bn) worth of financing for Jurong Aromatics Corp's (JAC) 1.5m tonne/year aromatics project in Singapore, with the debt package expected to close in the fourth quarter of this year, Jurong Aromatics and ING said in a joint statement on Tuesday.

The financing would partly fund the project, which would involve building a condensate splitter and a 1.5m tonne/year aromatics facility on Singapore's Jurong Island.

The bulk of the financing being arranged has a term of up to 15.5 years and reflects strong interest from South Korean entities, the companies' statement said.

"Banks are required to respond to the invitations with firm commitments in October with financial close expected in  late November or early December of this year," the statement said.

Bruce Macfarlane, who is leading the ING advisory team, said: "The timing seems perfect now, with almost no other deals of this size or quality expected in the market this year and certainly not for US dollar funding in Singapore with such strong support from the Korean ECAs (export credit agencies) that JAC enjoys."

South Korea-based firm SK Energy is the biggest stakeholder in JAC, with a 30% interest, while Chinese polyester producer Jiangsu Sanfangxiang Group Co Ltd, through its unit Sanhai International Development Co Ltd, controls 25% of the Singapore-based company.

Global commodity trader Glencore has a 10% interest in the project. Other shareholders include Arovin Ltd, which is owned by Vijay Goradia of Vinmar Group, with a 10.5% stake in the project and Shefford Investment Ltd, which is owned by Hadiran Sridjaja, with a 9.5% stake.

"We have strength in shareholding structure," said a source from SK Energy, expressing confidence that JAC's financing bid would be successful.

The remaining 15% of JAC is held by Thai KK (5.1%), Essar (4.9%) and Singapore's Economic Development Board (5%), said the SK Energy source.

Financing for JAC's project was hit by the credit crunch in late 2008 and had to be pushed back.

"We...expect a favourable reception from lenders given the long anticipation by the bank market of its launch, the favourable recovery of the financial markets, the conservative financial structuring, strong commercial structure and robust economics of the project," a JAC official said in the statement.

($1 = €0.78)

For more on aromatics visit ICIS chemical intelligence
Read John Richardson and Malini Hariharan’s Asian Chemical Connections blog
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By: Pearl Bantillo
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