Basic Industries Corporation (SABIC) has appointed Al-Ahly Capital to advise on a possible listing of its specialty chemicals business.
According to Arabiyanet, this offer is expected to raise hundreds of millions of dollars.
and two sources said the company is also looking for foreign banks to take on advisory roles, and that HSBC and JPMorgan are among those in the final stage of promoting the deal, which could be launched at a later time. This year or early 2022.
and Saudi Arabia, which launched the $ 29.4 billion IPO of Aramco in 2019, has become one of the Middle East's largest markets for deals.
The Kingdom is encouraging further listing and is seeking to deepen capital markets under reforms aimed at reducing its dependence on oil.
The sources refused to reveal their identity because the matter has not been announced yet.
AlAhli Capital did not respond to Reuters' request for comment, while JP Morgan and HSBC declined to comment.
SABIC is 70% owned by Aramco, and its value is estimated at $ 83.5 billion. The profits of its specialized businesses that produce resins, thermoplastic compounds, thermal compounds and additives are not separated. SABIC owns 31.5% of the Swiss company, Clariant, of specialty chemicals.
The COVID-19 pandemic has dented global demand for the petrochemical industry and Fitch Ratings has said it expects only a partial recovery in 2021.
Analysts said listing the specialist business would be in line with the company's plan to restructure its business into strategic business units.
Yusef al-Husseini, equity analyst at EFG Hermes, said it makes sense to focus on each business individually, especially majors that are completely different from commodity chemicals.
the growth profiles of these companies vary, with the specialty growth potential much better than the commodity chemicals, so each company needs its own capital structure / financing plans, and strategy And cash flow management.
