Sabic affiliate in $1.3bn stock-for-debt swap
by This email address is being protected from spam bots, you need Javascript enabled to view it on Monday, 03 December 2007
Arabian Industrial Fibres (Ibn Rushd), an affiliate of Saudi Basic Industries Corp (Sabic), said Saturday it had agreed a debt-for-equity swap proposal which will see almost SR5 billion ($1.3bn) in debt converted into ordinary shares.
In a statement on the Saudi bourse web site, shareholders said the company would issue the shares to pay off debts to its main lenders, Sabic and the government-owned Public Investment Fund (PIF). The deal will raise the firm’s capital from SR3.55 billion to SR8.51 billion.
Sabic’s stake in Ibn Rushd would be 45.19% after the swap, while PIF would hold 33.51% with other major stakeholders including the Saudi pension fund, Gulf Investment Corporation, Saudi pharmaceutical SIPMACO and Arab Petroleum Investments Corporation.
The polyester and aromatics producer had accumulated losses equal to 75% of its capital. The swap is an attempt to safeguard the future of the beleaguered company before offering 40% of its capital in an initial public offering.
The company did not have many options beside the swap. According to its rules, whenever its losses reach 75% of its capital, the company’s board must call for an extraordinary meeting to reach a decision to sell it or keep it running.
People familiar with the company’s situation said that the swap will help bring down its losses below 40%.
Arab daily Alsharq Al-Awsat said in November Ibn Rushd owed SR3.6 billion to PIF and SR1.3 billion to Sabic, which includes SR228 million handed out by Sabic for a new plant.
READERS' COMMENTS
MORE FROM ARABIANBUSINESS.COM
TOP IN MIDDLE EAST BANKING & FINANCE
TOP MIDDLE EAST BUSINESS STORIES
ALSO IN MIDDLE EAST BANKING & FINANCE
LATEST MIDDLE EAST BUSINESS NEWS
- Banking & Finance: Dubai gov't repays $1bn aviation bond
- Personal Finance: Credit bureaus combine to form regional group
- Healthcare: Kuwait swine flu fatalities rise to 24
- Politics & Economics: Mideast needs to improve insolvency rules - World Bank
- Travel & Hospitality: ADNH sees net profit up by 28% but hotels suffer
SHARE PRICE CHECK
RELATED STORIES
Arabian Industrial Fibres
Saudi Basic Industries Corporation (SABIC)
- Petchems help Saudi end higher
7 Nov '09 | News - SABIC posts 50% drop in Q3 profits
18 Oct '09 | News - Saudi shares up, Safco down on poor Q3
10 Oct '09 | News




