As part of a US$19.3 billion fundraising package, Sadara Chemical Company, recently issued a SAR7.5 billion (US$2 billion) Sukuk Musharakah through its SPV, Sadara Basic Services Company. Initially offered at SAR5.25 billion (US$1.4 billion), the issuance received strong investor demand resulting in an oversubscription of 2.6 times. In keeping with this demand, the firm has upsized its issuance to SAR7.5 billion.
The proceeds from the issue will be used to finance and procure the construction as well as the delivery of plants forming part of a chemicals complex located in the Jubail Industrial City II in the Eastern province of Saudi Arabia. The company is constructing a fully integrated chemical facility complex, the largest to ever be built in a single phase.
Holding a tenor of approximately 16 years, the profit payment expects a return of six-month SAIBOR plus 95bps per year, to be distributed semi-annually. The Sukuk Musharakah structure was approved by the joint Shariah Committee of Alinma Investment Company and AlBilad Investment Company, Deutsche Bank Shari’a Advisors and the Shari’ah Committee of Riyad Capital.
The papers are issued in Saudi riyals and governed by the laws of the kingdom, as well as English law. The face amount of the certificates were issued in denominations of SAR50,000 (US$13,329.8) and integral multiples of SAR50,000 in excess thereof, subject to a minimum subscription amount of SAR1 million (US$266,596).
AlBilad Investment Company, Alinma Investment Company, Deutsche Securities Saudi Arabia and Riyad Capital act as the joint lead managers and the bookrunners for the deal. Legal advisers to the lead managers are, Milbank, Zeyad S Khoshaim Law Firm in association with Allen & Overy, White & Case, Hatem Abbas Ghazzawi & Co. and Tweed, Hadley & McCloy. — NA