Saudi Aramco buys $702 mln stake in petrochemical JV from Sumitomo Chem

SUMITOMO CHEMICAL

07/08/2024 07:09

TOKYO, Aug 7 (Reuters) - Saudi Aramco  2223.SE  has
agreed to buy from Japan's Sumitomo Chemical  4005.T  a 22.5%
stake in their petrochemical joint venture Petro Rabigh
 2380.SE  for $702 million, the companies said in a joint
statement on Wednesday.
    Under the deal, Aramco and Sumitomo Chemical will each
provide $702 million in funding to Petro Rabigh and waive loans
worth a total $1.5 billion, the statement said.
    The deal shrinks Sumitomo Chemical's stake in the joint
venture to 15% while increasing Aramco's share to 60%.
    The funding and loan waivers are part of a remedial plan
that Aramco and Sumitomo Chemical intend to explore with Petro
Rabigh, the parent companies said.
     The remedial plan also includes initiatives to upgrade the
refinery with the aim of helping improve the profitability of
the business, they said. 
    The deal aligns with Aramco's downstream expansion and
Sumitomo Chemical's move away from commodity chemicals toward
speciality chemicals, they added.
    Sumitomo Chemical plans to book a pre-tax loss of 27 billion
yen  ($183 million) in the July-September quarter as a result of
the deal, the company said in a separate statement, adding that
it is sticking to its annual profit forecast it announced in
April.
    ($1 = 147.5000 yen)

 (Reporting by Yuka Obayashi; editing by Miral Fahmy)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))