Jubail petrochemicals plant looks to extend date by which it must be fully operational
Saudi Basic Industries Corporation (Sabic) is seeking a second extension to the date by which its $12bn Saudi Kayan project must be fully operational.
Around a year ago the company also had to ask banks for an extension to the long-stop date, the date by which the project must be completed or the banks can say the financing is in default. At the time banks agreed to the request.
One banker involved in the Saudi Kayan financing says that talks on extending the long-stop date are proceeding smoothly, lenders should agree to the new terms.
Saudi Kayan, which has gone over budget and behind schedule, should have been finished and operational by October 2012. It is still not fully operational and it is not clear when the new long-stop date will be.
The news comes as the company reports its first quarterly profit since it began operations in 2009. For the third quarter of 2013 the company made a profit of SR43m. Analysts had been forecasting another loss. The surprise positive results led to shares in the company rising from SR11.95 on 10 October, the last day of trading before the results were announced, to SR13.40 on 21 October.
One equity analyst in Riyadh said the profit figures had caused, considerable excitement amongst investors. On an annual basis the company is still not expected to make a profit until 2015, according to some forecasts.
The move comes as another publically listed Saudi Arabia-based petrochemicals complex also faces problems around its debt. The banks are sending PetroRabigh a reservation of rights statement a legal letter informing the firm of the lenders rights in the event of a breach of the $9.8bn loan agreements. The lenders also plan to write to PetroRabigh to express concern about the companys poor performance and major problems with the power plant associated with the scheme.
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