Tasnee says banks rescheduled facilities for acrylic subsidiaries

Logo of National Industrialization Co. (Tasnee)

National Industrialization Co. (Tasnee) announced the refinancing and rescheduling of existing Islamic facilities for some subsidiaries, Saudi Acrylic Acid Co., Saudi Acrylic Monomers Co., and Saudi Acrylic Polymers Co.

The financing entities are Alinma Bank, Al Rajhi Bank, Bank AlJazira, Banque Saudi Fransi (BSF), Saudi National Bank (SNB), Saudi Awwal Bank (SAB), and Riyad Bank, the company said in a filing to Tadawul today, Feb. 19.

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It added that the move is part of its strategy to make efficient use of the SAR 750 million in cash available with the subsidiaries.

The banks participated in the prepayment of loans using partial waivers while accommodating the differences among select individual banks.

Furthermore, the banks agreed to reschedule the remaining loan, providing an extended repayment period and a reasonable interest rate.

The existing financing is valued at SAR 3.07 billion, while the amount refinanced is SAR 1.30 billion. The remaining balance was settled against the available cash on the Acrylic Complex balance sheet, Tasnee said.

It added that the pre-rescheduling financing duration was six years and 10 months until Dec. 31, 2031. After the rescheduling, the duration became 15 years until Feb. 19, 2040.  

The subsidiaries will provide these guarantees: assignment of residual proceed, share pledge, security over accounts, onshore assignment agreement, principal promissory note, and variable rental and transaction payment promissory note.

The related parties are Saudi Acrylic Acid Co., Saudi Acrylic Monomers, and Saudi Acrylic Polymers Co., as they all are 52.29% owned by Tasnee.

Tasnee Vice Chairman Talal Al Maiman is also BSF Vice Chairman, the company said, adding that the transaction was completed without any preferential terms.

The refinancing and settlement of these loans is expected to result in gains arising from the prepayment and waiver process. Also, savings in financing costs would have a positive impact on the cash flows as well as potential loan modification gains on the refinancing.

Such items shall be subject to further assessments based on IFRS, poised to be reflected in Tasnee’s interim consolidated financial statements for the quarter ending March 31, 2025.

In a separate statement, Sahara International Petrochemical Co. (Sipchem) said it directly and indirectly owns a combined 43.16% stake in Saudi Acrylic Acid Co., Saudi Acrylic Monomers Co., and Saudi Acrylic Polymers Co.

The financial impact of Tasnee subsidiaries’ refinancing process is expected to be reflected on Sipchem’s Q1 2025 consolidated income statement.