Saudi Acrylic Acid Company (SAAC), a joint venture petrochemicals company, is set to complete the financing for it $1.5-2bn acrylic acid plant at Jubail in the New Year.

Banks lending to the project are to sign commitment letters on 18-19 December, with financial close targeted for early in the second quarter of 2012. The deal will mainly consist of a nearly $1.3bn sharia-compliant bank tranche, financed by the local banks lending in Saudi riyals.

Pricing on the deal starts at about 170 basis points above the Saudi interbank offered rate (Sibor).

The sponsors are already in talks with the Saudi Industrial Development Fund (SIDF) and Public Investment Fund (PIF) for loans totalling about $800m, which will be used to repay part of the local bank loans. Plans to raise $200m from Export-Import Bank of Korea (Kexim) are understood to have been dropped (MEED 21:10:11).

Banks in the deal include Samba, Banque Saudi Fransi, Sabb, National Commercial Bank, Saudi Hollandi, Alinma, Al-Rajhi and Riyadh Bank. The fund was about 50 per cent oversubscribed, according to a source close to the deal. Several of the banks involved in the long-term financing are already involved in a $500m bridge loan that was put in place to finance the start of construction at the Jubail site (MEED 20:05:11).

The financing will be used to fund three petrochemicals projects being developed by joint venture companies between the local petrochemicals firms Tasnee and Sahara, and Germany’s Evonik Industries. The three companies are SAAC, Saudi Acrylic Polymers Company (Sapco), and Saudi Acrylic Monomers Company (Samco). The financing is structured so that lenders make one commitment to the three companies, which is split between them based on the size of their overall project cost.