Saudi Basic Industries Corp. — Capital/Financing Update 2014

Jun 26, 2014

Addendum announcement from Saudi Basic Industries Corp related to entering into a strategic partnership with Mitsubishi Rayon Co., Ltd.

2010 · 26/06/2014 08:12:36 · Announcement #34948 · View on Saudi Exchange

Addendum announcement from Saudi Basic Industries Corp related to entering into a strategic partnership with Mitsubishi Rayon Co., Ltd.

This has reference to the SABICs announcement published on Tadawul on 31/5/2011 regarding entering into a strategic partnership with Mitsubishi Rayon Co., Ltd. for the construction and operation of two new manufacturing plants in Jubail Industrial City, one for the production of Methyl Methacrylate Monomer (MMA) with 250,000-metric-ton annual capacity, and the other for Poly Methyl Methacrylate (PMMA) with an annual capacity of 40,000 metric tons, both adopting state-of-the-art world technologies. SABIC announces the completion of all requirements relevant to the establishment of a 50-50 joint-venture with Mitsubishi Rayon Ltd., with a capital of SR 1.35 billion.

After a techno-commercial review, the EPC contract has been awarded to CTCI Corporation (Taiwan) on 25/06/2014. The estimated total cost of the establishment the joint venture and the construction of the project amounts to SR 4.5 billion. The engineering works are scheduled to begin on 25/06/2014, and completed in the first quarter of 2017. The project will be financed by partners and banks. The commissioning of the joint venture is expected to be in the second quarter of 2017 for about six months, after which the commercial operations will begin. Impact on financial results is expected after the announcement of the commercial operations. The relevant progress details will be announced in due course.

The process of preparing the fundamental engineering designs and concluding the procurement agreements took longer than scheduled. The aim was to complete the feasibility studies and conclude some relevant agreements. During this period, there was no significant financial impact. Through this partnership, SABIC aims to achieve its strategic goals and enhance its leading position. The joint venture will introduce new high value products, which will diversify material used in industrial clusters, thus allowing expansion and further diversification in Saudi Arabias industrial sector, creating new opportunities in the downstream industries such as construction, automotive, electronics, medical technologies, paint and coating.

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.