The world’s largest petrochemicals producer, Saudi Basic Industries contemplates new Sukuk issuance (By IFN)

The world’s largest petrochemicals producer, Saudi Basic Industries contemplates new Sukuk issuance

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SAUDI ARABIA: Saudi Basic Industries (SABIC)’s chief financial officer, Mutlaq Al Morished says that the government-owned company, also the world’s biggest petrochemicals producer by market value, will look to tap into the Islamic capital markets by the end of this year, or early next year. Speaking to the press, he said: “We will tap the market sometime late this year, or early next year. It’s too early to comment on the size of the bond sale, which SABIC would prefer to be Islamic.” The company’s project pipeline is currently estimated at SAR40 billion (US$11 billion), over the coming years. The company is said to have trimmed its operations following a protracted construction and infrastructure slump in the region and a dip in consumer spending on automobiles and appliances. Earlier reports have also alluded to the company looking to expand into the US, with studies on investment opportunities said to be currently underway. If the deal goes through, it will mark SABIC’s third Sukuk issuance following its SAR8 billion (US$2.13 billion) sophomore Sukuk in July 2007. The 20-year Sukuk which was arranged by HSBC Saudi Arabia had a call option after five years, allowing for an early repayment. In June last year, the company had filed a statement to the Saudi Arabian stock exchange saying that it will purchase the Sukuk’s assets pursuant to the terms and conditions, followed by a cessation in trading on the 16th June 2012.