Saudi’s Advanced Petrochemical Seeks Shareholder Nod For Sukuk

Saudi Arabia’s Advanced Petrochemical Co will seek shareholder approval next week to issue sukuk, helping it widen its funding sources, the company said in a bourse filing.

The firm will hold a general meeting on Sept. 15, it said without specifying the possible size of the issue or how it would use the funds raised.

In the past, Advanced Petrochemical has relied on bank loans, including Islamic equivalents, to fund itself; last year it raised SAR200 million ($53 million) through a two-year murabaha, a common Islamic financing contract, for a housing project.

In 2007, it set up a SAR1.2 billion murabaha facility which had SAR500 million still outstanding as of December.

Last week, the firm announced plans to invest in a project in South Korea worth around $1 billion to produce propylene, in a joint venture with South Korea’s SK Gas. That project will be financed with 40 per cent equity and 60 per cent debt, the company said.