SABIC plans to begin borrowing nearly US$9 billion in the next month, mostly in the United States, to fund its purchase of General Electric's plastics business.
SABIC bought GE Plastics for US$11.6 billion in May in the largest Gulf Arab acquisition ever announced, with a plan to borrow around 75% of the cost through a mix of bonds, bank loans, and institutional loans, mostly in the United States. SABIC, the world's largest petrochemical company by market value, would also raise some funds in Europe and the Middle East to fund the purchase.
SABIC is selling US$1.3 billion of Saudi Riyal-denominated Islamic bonds this month to fund its general business activity and not the GE Plastics purchase. SABIC is investing as much as US$30 bln to boost output to 80 million tpa by 2012 from 50 million tons last year. The company would borrow about US$20 bln of that amount.
SABIC has mandated HSBC Saudi Arabia and Riyad Bank as lead managers and book runners for the Sukuk issuance, which features a Sukuk structure approved by SABB Amanah's Shariah Supervisory Committee. The Sukuk offering is expected to be subscribed principally by institutional investors, consisting of banks and financial institutions, fund asset managers, pension and insurance companies and other institutional investors. Individuals are also eligible to purchase the Sukuk through either of the two joint lead managers.
13-Jul-07 
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