Alujain inks deal to sell 35% stake in NATPET for SAR 1.87B

Logo of Alujain Corp.

Alujain Corp. signed an agreement to sell a 35% stake of its subsidiary, National Petrochemical Industrial Co. (NATPET), to Basell International Holdings B.V., a subsidiary of New York Stock Exchange-listed LyondellBasell Industries N.V., for nearly SAR 1.87 billion ($500 million).

The agreement covers selling a 35% stake, representing 37.45 million shares in NATPET’s capital, to Basell International, as part of a comprehensive joint venture arrangement, the company said in a statement to Tadawul.

The agreement is subject to preconditions and warranties related to amendments to the structure of NATPET and the new project company and obtaining the necessary approvals from the relevant authorities as per the terms of the agreement.

Alujain’s ownership in NATPET at the date of signing this agreement stands at 98.7% of the total shares of NATPET.

NATPET is a closed joint stock company with its head office and propylene/polypropylene Complex in Yanbu Industrial City to produce propylene/polypropylene and its derivatives, having a nameplate production capacity of 400,000 tons per year of polypropylene. The authorized and paid-up capital comprised 107 million shares of SAR 10 per share and the book value of the company stands at SAR 2.53 billion as of November 30, 2023.

The transaction aims to achieve the strategic objectives of the two partners, and enableAlujain to deal optimally with its current and future financial obligations.

Once the deal is completed, Alujain will receive approximately SAR 1.87 billion in cash. The deal is expected to be completed once the terms of the agreement are met and the relevant approvals are obtained.

Alujain will announce the completion of the transaction or any other material developments in due course in accordance with the relevant regulatory requirements.

In a separate statement, the Alujain pointed out that the joint venture included Basell International entering into a shareholding partnership with Alujain in NATPET with a share of 35% of the company’s capital (as per the details in sale announcement).

 Basell International will invest and own 35% of the new project company capital.

The cost of its capital investments is estimated at approximately SAR 7.5 billion, after completing the current detailed engineering design (FEED) phase and evaluating the economic feasibility study for the new project, and obtaining the necessary approvals to invest in the new project, which will achieve the strategic goals of the two partners.

This deal resulted in the signing of a number of agreements, including an agreement to purchase a share representing 35% of the shares of NATPET, a shareholding agreement between the two partners, a marketing and offtake agreement, an allocation of volumes agreement, a project management agreement, as well as a cost sharing and reimbursement agreement.

It is expected that these agreements will contribute to achieving the goals of the energy sector within the Kingdom’s Vision 2030 by maximizing the added value to the national economy achieved from the sector.

These agreements will support Alujain’s current expansion plans into high-end co-polymer grades and specialized polypropylene compounds of high value to support local specialty plastics conversion manufacturers, enhance the company’s global competitiveness and the sustainability of its business.

Upon completion of the detailed design phase, Alujain will receive compensation proportional to what was invested in the new project, in addition to a development bonus, once final approvals are obtained for investment in the new project.

The agreements include preconditions and guarantees related to amendments to the structure of NAPTET and the new project company to suit the partnership agreement, and obtain the necessary approvals from the relevant authorities according to the terms of the agreements.

The following table indicates the financial data for NATPET for the last three years: