Saudi Kayan signs refinancing deal worth SAR 8.1B

Saudi Kayan headquarters

Saudi Kayan Petrochemical Co. signed a Murabaha refinancing deal worth SAR 8.1 billion with several local banks.

The refinancing agreement includes replacing the existing debt with new financing.

According to a statement to Tadawul, the financing parties include Saudi National Bank (SNB), Banque Saudi Fransi (BSF), and Alinma Bank. The original financing term before restructuring was eight years, maturing in December 2027, while the new term after restructuring is 10 years, ending in December 2034.

For more news on listed companies

The loan has a 10-year tenor with a grace period until the end of 2025. The debt schedule starts with low principal payments, which increase gradually to 13% of the principal amount in 2028 and continues through 2034.

The agreement was signed on March 16, with all refinancing and repayment procedures for the existing loans to be completed by March 18, the statement added.

The agreement is covered by a promissory note and accounts receivable, the statement pointed out, noting that there are no related parties to the deal.

The agreement aims to support Saudi Kayan’s financial position and improve cash flows, contributing to the achievement of the company’s goals and strategies. The impact of the refinancing agreement will be reflected in the company's financial statements starting from the first quarter ending March 31, 2025.

The statement further highlighted that the refinancing will enhance its financial solvency, allowing it to achieve rewarding financial returns, tackle challenges, manage risks, respond to market fluctuations, and manage liquidity flexibly, thus maximizing shareholder returns.

Over the past years, Saudi Kayan successfully reduced the debt level related to the construction and development of its operations from SAR 34.4 billion to SAR 8.1 billion, as shown in the audited financial statements for the year ending December 31, 2024.

This decrease in debt was achieved through the new refinancing process, building on previous financing efforts and early repayment of some loans, as previously announced in the market.

These efforts have contributed to reducing the debt burden and strengthening the company’s financial position.

The new refinancing agreement with local banks reflects the company’s creditworthiness and the trust it has earned with financial institutions over the years, highlighting the strength and stability of its financial position, the statement noted.

This agreement reflects the company’s commitment to maintaining and ensuring the sustainability of its financial position, achieving optimal capital structure.

Moreover, the agreement will enable Saudi Kayan to focus on strategic priorities, create added value for its shareholders, and enhance the company’s position to achieve continued success despite the challenges faced in the petrochemical sector.