Petro Rabigh says Aramco-Sumitomo Chemical deal boosts financial position

Logo of Rabigh Refining and Petrochemical Co. (Petro Rabigh)

Rabigh Refining and Petrochemical Co. (Petro Rabigh) hailed the steps announced by Saudi Arabian Oil Co. (Saudi Aramco) and Sumitomo Chemical Co., Ltd. (Sumitomo), which echoed both companies’ commitment -as key shareholders and creditors- to the company’s long-term prospects, according to a statement to Tadawul.

The company said that it looks forward to agreeing with Saudi Aramco over a mechanism to implement these measures to reinforce its financial position, strengthen balance sheet, and reduce the accumulated losses.

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This announcement by both companies will significantly complement the measures and initiatives highlighted by Petro Rabigh when the accumulated losses reached 35% of capital, it added.

Petro Rabigh will disclose the impact of the announced transaction and its turnaround strategy as appropriate.

Saudi Aramco and Sumitomo agreed to take certain specific steps to improve Petro Rabigh’s financial position and facilitate its turnaround strategy.

These steps include waiving existing revolving shareholder loans, arranged equally by Saudi Aramco and Sumitomo to Petro Rabigh, at $1.5 billion, or SAR 5.625 billion, with $1 billion, or SAR 3.750 billion to be waived in 2024 and $500 million, or SAR 1.875 billion, to be waived in 2025.

This is in addition to injecting a sum of SAR 5.264 billion, or SAR 2.632 billion, in additional funds into Petro Rabigh through an agreed-upon mechanism, subject to the closing of the transaction.

Saudi Aramco and Sumitomo signed earlier a binding share sale and purchase agreement pursuant to which Saudi Aramco will acquire Sumitomo’s 375,974,998 shares in Petro Rabigh, representing approximately 22.5% of the share capital, for $702 million, data compiled with Argaam showed.