Saudi International Petrochemical Company (Sipchem) will start meeting qualified investors this month for a potential sukuk (Islamic bond).

The company plans to privately place the sukuk solely with sophisticated investors, it said in a statement to the Saudi Stock Exchange (Tadawul) where its shares are traded.

The petrochemicals firm said the local Riyad Capital and NCB Capital are the managers on the transaction, adding that the size of the offering will be determined by market conditions. Local Salman al-Sudairy and the US’ Latham Watkins are legal advisers to the lead managers and the local Khoshaim & Associates and the UK’s Allen Overy are advising Sipchem.

The company, which has struggled to maintain profitability on the back of sliding oil prices and weaker demand for chemical products, aims to diversify its financial resources through the sukuk offering.

Sipchem recently acquired Kuwaiti firm Icarus’ stake in its Jubail acetyl complex. Icarus held an 11 per cent stake in International Acetyl Company and International Vinyl Acetate Company, for which Sipchem paid SR375m ($100m). Sipchem’s stake in each firm has increased to 87 per cent, while Germany’s Helm still holds 10 per cent and the Saudi Supreme Council of Endowments 3 per cent.

Sipchem secured $1.8bn of project finance in 2008 to build the acetyl complex, and about $385m in 2012 to build the third phase of the Jubail petrochemicals complex.

It has several projects due to start commercial operations in 2016, including a polybutylene terephthalate plant (PBT), a Saudi specialised products plant and an ethylene vinyl acetate (EVA) film plant, MEED reported on 29 March.