Local banks to provide around half of funding for expansion project
Saudi Aramco Lubricating Oil Refining Company (Luberef) is planning to raise about $1bn from local sources to finance the expansion of its lube oil refinery in Yanbu.
The firm, a joint venture of Saudi Aramco and the local Jadwa Industrial Investment Company, has appointed Riyadh Bank to coordinate the deal. Responses from banks are due by mid-April.
The funding for the expansion is set to be split roughly equally between commercial bank loans and financing from the government owned-Public Investment Fund. Both will be lending in Saudi riyals. The tenor of the debt will be 10 years and sources close to the transaction say that it is likely the deal will be done by just three or four local lenders.
“With a deal this size, and Aramco a 70 per cent shareholder, it will be an easy deal for just a few banks to fund given how desperate they are to book assets,” says one banker in the kingdom.
Earlier this month Luberef asked engineering, procurement and construction contractors to bid for the expansion project, which will include building a new hydrocracker at the Yanbu refinery. Luberef currently produces about 280,000 tonnes a year (t/y) of lubricants at its Yanbu refinery and about 550,000 t/y in total from Yanbu and Jeddah.
You might also like...
Hassan Allam and Siemens confirm Hafeet Rail award
24 April 2024
UAE builds its downstream and chemical sectors
24 April 2024
Acwa Power eyes selective asset sales
24 April 2024
Bahrain mall to install solar carport
24 April 2024
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.