PetChem unit executes first phase of loan repayment of US$400m
KUALA LUMPUR: Pengerang Petrochemical Co Sdn Bhd (PPC) has executed the first phase of financing from various export credit agencies (ECAs) and banks for the repayment of a US$1 billion (RM4.08 billion) bridge loan.
PPC, which is 50 per centowned by Petronas Chemicals Group Bhd, has procured US$400 million for the repayment.
Of this, the financing document for US$200 million was executed on Monday, said PetChem in a filing to Bursa Malaysia yesterday.
The financing document for the other US$200 million is expected to be executed by end of this month.
PetChem said the remaining project financing of US$600 million under Phase 2 was expected to be executed by June, bringing the total project financing amount to US$1 billion, with a tenure of 15.5 years.
It said the execution of the project financing was not expected to have any material effect on its earnings for the financial year ending December 31.
The ECAs and commercial banks have requested for Petroliam Nasional Bhd (Petronas) and Saudi Aramco, which are the holding companies of PetChem and Aramco Overseas Co BV, respectively, to provide completion guarantees on several rather than joint basis as security.
“In view of the corporate guarantee provided by Petronas to the ECAs and commercial banks, PetChem has entered into a backto-back guarantee arrangement through a binding letter of undertaking issued to Petronas.
“PetChem is also required to provide share charge over its shares in PPC as part of common security feature for the project financing throughout the tenure of the financing,” it said.