Saudi Polymers Company has asked banks for an extension on the long-stop date in its financing agreements as a result of the plant not yet being fully operational.
Although the plant, which cost $5.2bn to build and was funded by a $3.6bn debt package, is currently operational and producing a good profit, it has had technical problems with its cracker and other parts of the facility. This has prevented it from reaching final completion.
As a result, it is not expected to meet the long-stop date outlined in the financing documents, which means lenders can say the financing is in default. Bankers involved in the deal say most lenders to the scheme are looking to agree to extend the long-stop date.
The original funding package of $1.9bn from 2008 was provided by a group of local and international banks, including the local Sabb, Samba and Riyad Bank, and the UKs Standard Chartered and Royal Bank of Scotland, and Frances BNP Paribas.
It is the latest Saudi petrochemical scheme to seek an extension to its long-stop date. Saudi Kayan, an affiliate of Saudi Basic Industries Corporation Sabic, recently requested a second extension to its long-stop date after the project was plagued by operational problems.
Saudi Polymers Company is a joint venture of the local National Petrochemicals Company (Petrochem) and the US Chevron Philips.