Saudi Basic Industries Corp. — Capital/Financing Update 2018

Dec 4, 2018

Saudi Basic Industries Corporation (SABIC) extends its joint venture with the Japan Saudi Arabia Methanol Company Inc

2010 · 04/12/2018 16:26:21 · Announcement #52846 · View on Saudi Exchange

Saudi Basic Industries Corporation (SABIC) extends its joint venture with the Japan Saudi Arabia Methanol Company Inc

Element List	Explanation
Announcement Detail	In accordance with its strategy to strengthen its relationships with key global partners and its position in the petrochemicals industry, Saudi Basic Industries Corporation (SABIC) announces the signing of an agreement with the Japan Saudi Arabia Methanol Company, Inc. (JSMC) on 04 December 2018.

The agreement sets out the following:

1) SABIC will buy 50% of JSMC share in Arrazi (25% of all Arrazi shares) for US$150 million to make SABIC and JSMC shareholding 75% and 25% respectively in Arrazi. It is worth mentioning that the current joint venture expires on 29 November 2018 and SABIC which gives the right for SABIC to buy JSMC’s share in Arrazi which is 50%.

2) Extension of the partnership with the Japan Saudi Arabia Methanol Company Inc. in Saudi Methanol Company (Arrazi) for 20 years with 25% ownership. JSMC shall pay to SABIC US$1.35 billion for the extension of the term of the joint venture.

3) SABIC will use some or all of the above proceeds to finance the refurbishment of or replacement of Arrazi’s existing methanol plants.

4) SABIC will become an equal co-owner in a new more efficient methanol production technology to be commercialized.

5) As per the terms and conditions of the agreement, the Japan Saudi Arabia Methanol Company Inc. has the right at any time prior to 31 March 2019, to sell its remaining 25% shares in Arrazi to SABIC for a value of US$ 150 million. In this case, the terms and conditions mentioned above on 2, 3 and 4 will not be executed, and SABIC then will have full ownership of Arrazi.

6) Subject to regulatory approvals, the transaction is expected to be completed in 2019 where the financial impact will start. SABIC will announce that accordingly.

Saudi Methanol Company (Arrazi), is in the business of developing, establishing, owning and operating Methanol complex. SABIC is currently owning 50% and JSMC is owning 50%.

JSMC is in the business of investing and developing Methanol complex.

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.