Kuwait’s PIC acquires 49 pct of South Korean SKC petrochemical operations
3 new measures enforced for maintaining PRF cash assets
KUWAIT CITY, Aug 7, (Agencies): Kuwait’s Petrochemical Industries Company (PIC) has acquired 49 percent of operations of South Korean SKC, and the two firms agreed to establish a joint company producing propylene Oxide (PO) and propylene glycol (PG).
“The acquisition is part of Kuwait Petroleum Corporation’s (KPC)
strategy to boost its international petrochemical investments, particularly core petrochemical products with high added value,” KPC CEO Hashem Sayyed Hashem said in a statement Wednesday.
He said this partnership with SKC also included acquisition of 45 percent of SKC Evonik Peroxide Korea.
PIC CEO Mutlaq Al-Azmi said the partnership with SKC aimed at diversifying PIC’s international portfolio with the aim of securing better revenues and addressing fluctuation of prices.
SKC had $2.5 billion revenues last year. The company’s assets registered $3.5 billion in first quarter this year. SKC, whose main operations are in PO and PG production, exports products to more than 60 countries.
Meanwhile, three new measures have been enforced for maintaining the cash assets of the Public Reserve Fund (PRF) in order to avoid the negative impacts of withdrawals from the fund to deal with the budget deficit, reports Al-Anba daily quoting informed sources.
They explained that one of these measures is the transfer of approximately KD 8.5 billion from the total profits of KD 20 billion seized by state institutions to the Public Reserve Fund in five years.
The concerned authorities will confront any attempts by the state institutions to take control of their full profits or part of them that exceed the specified amount under any pretext even if the reason is to invest these profits.
The sources clarified that investing by purchasing securities as shares in the banks is not part of the tasks of state bodies, adding, “We have a specialized authority – Kuwait Investment Authority – that is authorized to conduct investment operations”.
They went on to explain that, as per the second measure, the state institutions are allowed to keep only ten percent of the accumulated profits.
These measures will ensure the stability of the liquidity of the Public Reserve Fund, return of profits when these profits are invested, and avoiding any losses that may occur as a result of a non-competent state body carrying out investment operations.
The third measure is refraining to approve any withdrawal from the Public Reserve Fund exceeding 50 percent of the total budget of the fund.
In response to a question about the demands to stop transferring ten percent of the public revenues to the fund for future generations and to allow the government to borrow from it as an appropriate alternative to stopping the withdrawal from the Public Reserve Fund, the sources responded by saying, “This step needs the relevant law to be amended. So far, no decision has been taken, and there are no indications for us to talk about”.