The loan is to have a tenor of between seven and 10 years, and a balloon mechanism - meaning that the bulk of repayments will be made towards the end of the loan period - will be included in the structure. Interested banks have been asked to bid individually for all or part of the package, bankers in Riyadh say.

Arab Petroleum Investments Corporation (Apicorp)is acting as Sadaf's adviser on the deal.

Sadaf, a 50:50 joint venture between Saudi Basic Industries Corporation (Sabic)and the Royal Dutch/Shell Group, is refinancing to optimise its capital structure by increasing its leverage and enhancing its returns on equity. The company is in the process of negotiating an energy conversion agreement with the US' CMS Energyfor a captive power plant at its Jubail base. It is also understood to be looking at future possibilities to expand its petrochemical facilities.