London, Asharq Al-Awsat- SABIC affiliate, Yanbu National Petrochemical Company (YANSAB), signed a package of loan contracts and facilities agreements valued at SR 13.125 billion (US$ 3.5 billion) with the Public Investment Fund (PIF), and a group of local, regional and global banks to fund the construction of its petrochemical complex in Yanbu Industrial City. Mutlaq Al-Morished, Chairman of the Board of Directors of YANSAB and SABIC Vice President for Corporate Finance, signed the contracts on behalf of YANSAB. Agents of the lending banks signed the contracts on behalf of the lending institutions.
Mr. Mohamed Al-Mady, SABIC Vice Chairman and Chief Executive Officer said, “The participation of such a large number of banks and financial institutions to meet the company’s credit requirements reflects the confidence that the world financial institutions attach to a sound and solid Saudi economy as well as the petrochemical industry in the Kingdom”.
YANSAB will make use of the Islamic loans to finance a great deal of the capital investment. Mr. Al-Morished explained that the European export credit agencies’ contribution to these loans amounts totaled SR 2.625 billion (US$ 700 million), which is equal to 29% of the commercial financing. This clearly reflects the confidence of these institutions in the future of YANSAB and the petrochemical industry in the Kingdom as a whole. He added that this confidence is also reflected through the number of participating banks. There are 19 in all, including 9 international and 3 regional banks. The coverage of commercial loans has exceeded the required amount by 65%. The contribution of the PIF is SR 4 billion (US$ 1.067 billion). Mr. Al-Morished lauded the PIF as well as the participating banks’ confidence in SABIC.
YANSAB is a Saudi joint stock company. SABIC owns 55% of YANSAB. A group of 17 local and regional companies owns 10% of the company’s shares. Saudi citizens own 35% following a public subscription process, which was described as the largest of its kind in the Saudi market.