National Petrochemical Company (Petrochem) announces that its subsidiary, the Saudi Polymer Company has signed financial agreement to refinance its existing Loan.

IntroductionNational Petrochemical Company announces its subsidiary (Saudi Polymer Company) has signed financial agreement to refinance its existing Project financing loan with Samba Financial Group and Riyad Bank
Date of Receiving the Credit Facility2020-03-08 Corresponding to 1441-07-13
FinancierSamba Financial Group and Riyad Bank
Credit Facility valueSR 3 Billion
Credit Facility durationFour years to be repaid in 8 semi-annual scheduled installments starting on June 2020 and end in December 2023.
Guarantees Provided for Credit FacilityPromissory note
Purpose of the Credit FacilityPetrochem’s subsidiary (Saudi Polymer Company) obtained its original project financing loan before the project started its construction phase, which had some strict conditions on the company, such as reserve account requirements as a guarantee for the credit facilities. And since the project has reached stable operating rates and improved financial conditions, along with a large portion of the loan already paid off, the Saudi Polymer Company has decided to refinance the original loan in order to obtain better financing terms, it also used the reserved accounts (SR 1,762 Million) to repay part of the original loan, which in turn helped to lower the new refinanced loan amount.It is worth mentioning that the refinancing process will not necessarily increase Petrochem’s ability to dividend out more to its shareholder in the near term.
Related PartiesPetrochem board member Mr. Eyad AlHussain is a board member in Samba Financial Group.
Additional InformationThe original loan amount was (SR 13,458 Million) obtained from the Saudi industrial Development Fund, the Public Investment Fund, and 19 commercial banks, of which nine where local banks. The first repayment started in 2013 and was planned to be fully repaid by 2023. Currently.The new refinanced loan is also scheduled to be fully repaid by the end of 2023.Saudi Polymer Company is owned 65% by Petrochem, and 35% by Arabian Chevron Phillips Petrochemical Company Limited.It is worth mentioning that this refinancing is not directly related to the Capital reduction plan at the Saudi Polymer Company, that was announced on Tadawul on 25 September 2019, as the Capital reduction is still moving forward and will be announced once it is achieved.