Saudi Aramco enters agreements to restructure Sadara's senior debt financing

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Saudi Arabian Oil Co. (Saudi Aramco) entered into agreements related to the restructuring of Sadara Chemical Co.’s (Sadara) senior debt financing and other commercial arrangements with respect to the procurement of feedstock and the marketing of Sadara’s finished products, the firm said in a statement to Tadawul today, March 29, 2021.

In relation to restructuring Sadara’s senior debt financing, Saudi Aramco and Dow Chemical Co. (Dow) agreed to guarantee up to an aggregate of $3.7 billion of senior debt principal in proportion to their ownership interests in Sadara, which is significantly lower than the $10 billion shareholder completion guarantees that were released when Sadara achieved project completion in November 2020.

The terms of the restructuring also include a principal repayment grace period until June 15, 2026, and an extension of the final maturity date from 2029 to 2038, in connection with all the facilities.

Saudi Aramco, Dow (and/or their affiliates) and Sadara also entered into agreements to provide additional feedstock by increasing the quantity of ethane and natural gasoline supplied by Saudi Aramco, and a gradual increase in Saudi Aramco’s rights to market, through Saudi Basic Industries Corp. (SABIC), finished products produced by Sadara (subject to certain agreed terms) over the next five years.

Sadara is a related party, as it is 65%-owned affiliate of Saudi Aramco.