Petro Rabigh shareholders approve plan to increase share capital to $4.45bn

The rights issue is aimed at strengthening the company’s equity position and reducing its long-term liabilities

Rabigh's refining and petrochemical facilities, 120 kilometres north of Jeddah. AFP

Shareholders of Saudi Arabia’s Rabigh Refining and Petrochemical Company, known as Petro Rabigh, have approved a proposal to increase the company's share capital by 90.75 per cent to 16.71 billion Saudi riyals ($4.45bn) through a rights issue.

The plan was approved during the company’s extraordinary general meeting on June 8, Petro Rabigh said in a statement on Thursday to the Tadawul stock exchange, where its shares are traded.

The rights issue will be offered to existing shareholders through the issuance of more than 795 million new shares at an offer price of 10 riyals per share.

“The proceeds of the rights issue will be deployed to manage down our existing long-term liabilities while creating a more favourable equity position from which we will advance at pace,” Othman Al-Ghamdi, president and chief executive of Petro Rabigh, said.

Petro Rabigh was originally established as a basic topping refinery with crude oil processing facilities. However, in 2005, Saudi Aramco and Japan’s Sumitomo Chemical formed an equal joint venture to transform the business into an integrated refinery and petrochemicals complex.

The company refines more than 400,000 barrels of crude oil daily and processes 1.2 million tonnes of ethane feedstock annually to produce a wide range of refined and petrochemical products.

As part of the rights issue, Petro Rabigh shareholders will be granted subscription rights in line with their holding in the company as of June 8, it said.

Shareholders will have the opportunity to purchase shares at the offer price of 10 riyals each throughout the June 14 to June 26 subscription period.

Petro Rabigh shareholders who decide not to participate will be able to sell their rights during the June 14 to June 21 trading period, the statement said.