Sabic and Maaden seek $2bn

Saudi Basic Industries Corporation (Sabic) and Saudi Arabian Mining Company (Maaden) are planning to raise $2,000 million in what would be the region's biggest Islamic project finance deal.

The financing will be used on their joint venture to develop a phosphate mine at Ras al-Zour.

The financial advisers on the deal, Standard Chartered Bank and Riyad Bank, are understood to be evaluating how much of the financing will be Islamic, with Maaden expressing a preference for as much Islamic funding

as possible.

Banks in the project finance market are understood to have told the financial advisers that they could raise this much in Islamic funding.

The final amount raised from commercial banks will depend on the size of the export credit agency tranche.

Currently, Korean Export Insurance Corporation is thought to be close to agreeing to supply about $600 million to the project, which would leave $2,000 million to be raised from banks.

Several large project finance deals are scheduled in Saudi Arabia, with $1,800 million to be launched by Saudi Kayan, and National Chevron-

Phillips looking to raise $1,500 million, both before the end of the year.

The Maaden/Sabic joint venture is likely to be underwritten before the end of the year, and could then be syndicated at the beginning of 2008.

In mid-September, Sabic confirmed the phosphate project would cost SR 21,000 million ($5,600 million), 62 per cent more than previously expected, because of rising construc-

tion costs.

Maaden is expected to raise a further $2,500 million through an initial public offering before the end of 2008.

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