Rabigh Refining and Petrochemical Co (PetroRabigh), one of the world’s largest integrated refining and petrochemical facilities, has announced its intention to proceed with a steep capital increase through a rights issue.
The Saudi Capital Market Authority (CMA) has approved the company raising its total share capital from SR8.76 billion to SR16.71 billion ($4.45 billion), which represents a 90.75% increase, subject to ratification by the firm’s EGM.
The rights Issue is being offered to existing shareholders through the issuance of 795,000,000 new shares at an offer price of SR10 per share.
Listed on the Saudi Exchange PetroRabigh will hold an Extraordinary General Meeting (EGM) where the company will seek shareholders’ approval on the transaction.
The transaction is in line with PetroRabigh’s strategic objectives to optimise and improve the company’s financial position through enhancing equity and reducing long-term liabilities.
PetroRabigh was originally established as a basic topping refinery with crude oil processing facilities. In 2005, Saudi Aramco and Sumitomo Chemical formed an equal joint venture to transform the business into a world-scale integrated refinery and petrochemicals complex.
To date, PetroRabigh is the only regional player offering both refined and petrochemical products and is amongst the top global-scale integrated facilities worldwide.
Strong asset base
Eng Ibrahim Al-Buainain, Chairman of PetroRabigh, commented: “Through its globally recognised founding shareholders, strong asset base, and diversified products, PetroRabigh is well positioned to maintain its position as the only regional player offering both petrochemical and refined products.
“By leveraging the network, knowledge, marketing and technology capabilities of its founding shareholders, PetroRabigh has been able to create innovative specialised products that have a high demand in the regional and international market. As a responsible business, our focus is, and will always remain, on long-term value creation. This transaction is an important lever that enables us to continue delivering on our strategic priorities and meet our commitments to our shareholders.”
Eng Othman Al-Ghamdi, President and CEO of PetroRabigh said: “As a company, we have a clear strategy supported by promising performance pillars and a pipeline of opportunities in both regional and international markets. We are confident in the strength of our business model and our ability to generate returns to our shareholders. The transaction is an important step in this process and will further enhance our equity position by bringing down debt levels and increasing our share capital, ensuring that the company is well-positioned to meet its objectives.”
Al-Ghamdi added: “Despite the challenging global market conditions in 2020, PetroRabigh achieved strong results in 2021 through improved efficiencies, reduced costs and robust demand for our products, setting us on a strong footing for 2022. The timing of this transaction is important, with the Rights Issue taking place against a positive backdrop of improved liquidity and, more importantly, a strong rebound for the company’s performance in the past year. We are laser-focused on creating added value for all our stakeholders and we are grateful for the continued trust and support of our shareholders.”
The management team at PetroRabigh have been working diligently in response to the challenges that emerged throughout the height of the pandemic.
Following a series of measures taken to protect staff and the business, the company’s accumulated losses have been amortised. The rights issue will support operations by paying down a considerable sum of existing liabilities, enabling greater access to new sources of capital for the future.-- TradeArabia News Service