Saudi Arabia’s Sipchem raises $480m sukuk bonds to fund projects

04 July 2011 10:34  [Source: ICIS news]

SINGAPORE (ICIS)--The Saudi International Petrochemical Co (Sipchem) said on Monday that it has successfully raised Saudi riyal (SR) 1.8bn ($480m) in five-year bonds called “sukuk” in Islamic financing.

The company’s first publicly listed sukuk increased from SR1.5bn at the close of the flotation on 29 June because of strong demand, the petrochemical major said in a statement to the Saudi Stock Exchange (Tadawul).

The total orders for the bonds, which have a floating rate note for five years, stood at SR4.5bn, the statement said.

The funds will help finance the company’s new projects, said Ahmad Al-Ohali, CEO of Sipchem.

In late April this year, the company said it was planning to build a polymers compounding plant in Jubail Industrial City, a joint venture with South Korea’s Hanwha Chemical Corp.

The 50:50 joint venture project is estimated to cost around SR225m, Sipchem said in an earlier statement.

The company plans to start production at the plant in the second quarter of 2013. The plant will produce special grades of resin to manufacture wires and cables that will be marketed to the Middle East and Europe, Sipchem said.

($1 = SR3.75)

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By: Pearl Bantillo
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