Orpic to choose adviser for potential $3.6bn fundraising

19 January 2012

Deal could include $2.7bn of debt refinancing

Oman Oil Refineries and Petroleum Industries Company (Orpic) is in talks with several banks about appointing an adviser to help it raise $3.6bn to fund a debt refinancing and development of a new refinery.

The company is hoping to refinance $2.7bn of existing debt and raise an additional $900m to fund an additional 70,000 barrels a day of refining capacity. In total, the expansion will cost $1.5bn, but Orpic is expected to fund the rest of the cost through equity.

Meetings with several banks were held in December 2011, and an appointment is expected to be made by the end of January. “Orpic is looking at its options, but wants to do the refinancing and raise the new money all at the same time on more of a corporate basis than a project finance deal,” says on banker involved in the talks.

A source at another banks in talks with Orpic says the company may decide not to go ahead with the refinancing because the firm’s current debts were raised before the credit crunch on good terms. “The existing debt was done pre-Lehman Brothers [which collapsed in September 2008], so the question has to be asked, why refinance that as you are unlikely to get better terms.”

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