PTT affiliate in Thailand signs US$475 mln credit facility agreement to boost PP output

09-Jul-07

PTT's polypropylene manufacturing affiliate, HMC Polymers Co., has signed a credit facility agreement to the tune of US$475 million with nine banks to fund its polypropylene capacity expansion. The credit facility will have a term of 10-and-a-half years. The expansion program will make the company the country's largest PP producer. 50% of the total syndicated loans provided by HSBC, KBC, Calyon, Standard Chartered and SMBC will come in the form of offshore loans. The other half is onshore credit arranged by Thai banks, including Bangkok Bank, which is also HMC's major shareholder, as well as Siam Commercial Bank, Krung Thai Bank and the Government Savings Bank. The loans will finance the company's two new production facilities to raise production capacity of polypropylene (PP) to 750,000 tpa from around 440,000 tpa. One of the new projects will produce propane dehydrogenation (PDH), to be used as feedstock for the new PP facility with production capacity of 310,000 tpa. The expansion projects will receive technological support from Basell, one of its key shareholders. The new plant will start commercial production in Q2-09. HMC's expansion comes after PTT Plc acquired a majority stake of 41.44% in the company last year for 10 billion baht from Bangkok Bank and its allies, making it the largest single shareholder in the plastic-pellet producer. Bangkok Bank and Hua Kee Co now hold 30%, while Basell (Thailand) Holding BV holds 28.56%. HMC also holds a 2.83% stake in PTT Chemical Plc and 14.27% in Rayong Olefins Co, another PTT petrochemical subsidiary.