Recently, Saudi Aramco announced that it has signed a final agreement to acquire an additional 22.5% stake in Rabig Refining and Chemical from its joint venture partner Sumitomo Chemical for US$702 million. Saudi Aramco and Sumitomo Chemical currently each own a 37.5% stake in Rabig Refining and Chemical. After the transaction is completed, Aramco will become Rabig's majority shareholder, holding approximately 60%, and Sumitomo Chemical's stake will be reduced to 15%. Rabigh's remaining 25% stake is listed on the Saudi Stock Exchange. The transaction is yet to be approved by regulators and third parties.

Saudi Aramco said that the proceeds from Sumitomo Chemical will be injected into Rabigh through a mechanism agreed with Rabigh, and it is expected to provide additional funds to Rabigh through a mechanism to be agreed upon to improve Rabigh's financial situation and support the joint venture's future strategy. The two companies also agreed to a phased waiver of $750 million each in shareholder loans, which would directly reduce Rabbig's debt by $1.5 billion. All of these measures will improve Rabig's balance sheet and cash flow, as part of the two companies 'exploration of Rabig's remediation plan, which also includes measures to upgrade the joint venture's refinery to improve profitability. The agreement is also consistent with Saudi Aramco's downstream expansion plans and Sumitomo Chemical's transformation plan from general chemicals to specialty chemicals.

Rabie Refining currently operates a 400,000 barrel/day refinery and a downstream integrated Rabie petrochemical complex. The joint venture's petrochemical products include olefins, polyolefins and aromatic hydrocarbons, as well as intermediates such as ethylene glycol, propylene oxide and methyl methacrylate.

Rabig Refining and Chemical Company recently announced a net loss of 1.10 billion Saudi rials in the second quarter, compared with a net loss of 1.36 billion rials in the first quarter. As of June 30, its cumulative losses had reached 8.871 billion reais, accounting for 53.09% of its issued share capital. Source: China Chemical News