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Manama: Saudi Basic Industries Corp. (Sabic) could be planning to raise up to $5 billion through a programme of sukuk, an official of the Saudi-based Islamic Development Bank said yesterday.
The world's largest chemical firm by market value, Sabic wants to use the money to pay for expansion, Islamic Development Bank Treasurer Mohammad Tarek told Reuters.
Sabic chief financial officer Mutlaq Al Morished declined to comment when contacted by Reuters.
Asharq Al Awsat newspaper yesterday quoted Morished as saying Sabic was waiting for approval from the regulator to sell $1.3 billion of sukuk.
Tarek has advised Sabic in the past on Islamic finance and discussed the new programme sukuk with the company as recently as three weeks ago, he said, adding the plans could have now changed.
"It's a programme of sukuk up to $5 billion, which would be sold in tranches. I doubt it would be one big issue," Tarek said adding that Sabic had been aware that a flood of supply was widening yields, making it more expensive to borrow.
"But when I spoke to them last they were quite keen to bring it forward and do it quickly, because they were also aware that there may be more issuance taking place," he said.
The Islamic Development Bank is a multilateral institution providing financial and technical assistance to Muslims.
Sabic bought General Electric Co's plastics business in May for $11.6 billion and said it would borrow around 75 per cent of the cost. The largest single sukuk sale raised $3.52 billion for Nakheel Group in December.
HSBC mandated to lead bond sales
HSBC had been mandated to lead the sukuk sale, which was likely to consist of bonds denominated in US dollars and Saudi riyals, Islamic Development Bank Treasurer Mohammad Tarek said.
HSBC officials in Dubai did not return calls for comment. HSBC officers in Saudi Arabia were closed on Thursday for the weekend.
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