KUALA LUMPUR: Petronas Chemicals Group Bhd (PCG) has disposed a 50 per cent stake in PRPC Polymers to Aramco Overseas Holdings, a wholly owned subsidiary of Saudi Arabian Oil Company (Saudi Aramco), for US$900 million or RM3.8 billion, making the buyer an equal joint venture partner in a mega integrated project.
In a statement to Bursa Malaysia, PCG said the divestment would have a positive cash flow impact by decreasing its capital expenditure commitment as a result of Saudi Aramco’s 50 per cent participation in PRPC Polymers, which is still in construction phase and the risk would remain high until the project completion in 2019.
“Subsequently, it will provide PCG with the financial flexibility to pursue other strategic growth projects,” it said.
PCG would also be able to leverage on Saudi Aramco’s experiences in execution, implementation and operation of similar large scale and integrated petrochemical projects, such as, Sadara Chemical Company.
“The divestment will also provide PCG with the potential opportunity to pursue future strategic collaborations with Saudi Aramco,” the statement added.
PCG said the proceeds from the divestment would be applied towards capital and operational expenditures as well as strategic growth projects in accordance with PCG’s business plans.
PRPC Polymers’ principal activities are to develop, construct, commission and operate polymers and glycol plants for the production and sale of products. PRPC Polymers has not commenced operations since the date of incorporation.
Based on the latest audited financial statements of PRPC Polymers for the financial year ended Dec 31, 2016, PRPC Polymers has not generated any operating income and recorded net loss of RM57 million while net assets value stood at RM1.3 billion. — Bernama