September 4, 2024 14:41

Aramco, the Saudi petrochemical giant, will raise its stake in Petro Rabigh to 60% by acquiring the 22.5% share owned by Sumitomo Chemical for $702 million, thereby taking control of the company. This operation aims to improve the financial position of the petrochemical company, which owns a refinery and a petrochemical complex on the western coast of Saudi Arabia.

Currently, both groups each hold 37.5% of Petro Rabigh, a company listed on the Saudi stock exchange since 2008. After the transfer, Sumitomo Chemical will remain a shareholder with a 15% stake.

Under the terms of the share sale and purchase agreement, all proceeds received by Sumitomo Chemical from the sale will be injected into Petro Rabigh, through a mechanism to be agreed with Petro Rabigh. Aramco will also provide additional funds to Petro Rabigh, via a mechanism also to be agreed, matching the $702m from Sumitomo Chemical to improve Petro Rabigh’s financial position and support Petro Rabigh’s future strategy, bringing the aggregate injection amount to US$1.4 billion.
In addition, Aramco and Sumitomo Chemical have agreed to a phased waiver of shareholder loans of $750m each, which will result in a $1.5bn direct reduction in Petro Rabigh’s liabilities.

Founded in 2005 as a joint venture between Saudi Aramco and Sumitomo Chemical, Petro Rabigh has an annual production capacity of 4.9 million tons of petrochemicals and 14.9 million tons of refined products. The integrated complex on the Red Sea coast, 165 km north of Jeddah, produces monomers, intermediates, polyolefins, thermoplastic olefins, EVA copolymers, ethylene propylene rubber (EPR), and polymethyl methacrylate (PMMA).

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