This article first appeared in The Edge Financial Daily on March 20, 2018

KUALA LUMPUR: Petronas Chemicals Group Bhd’s (PetChem) wholly-owned unit PRPC Polymers Sdn Bhd has secured a US$1 billion (RM3.92 billion) bridging loan from various local and international banks.

The proceeds will be used to fund part of the costs of developing and operating polymers and glycol plants in Pengerang, Johor, PetChem said in a filing with Bursa Malaysia.

The group said the execution of the bridging loan fulfils one of the conditions precedent in PetChem’s proposed sale of a 50% stake in PRPC Polymers to Saudi Arabian Oil Company’s (Saudi Aramco) wholly-owned subsidiary Aramco Overseas Holdings Coöperatief UA (AOHC) under an estimated US$900 million deal.

On Oct 2 last year, Petchem said the estimated US$900 million includes the divestment of 50% of any shareholder loans held by the group in PRPC Polymers to AOHC.

In its announcement yesterday, PetChem said the bridging loan has a tenure of 12 months with an extension of six months at PRPC Polymers’ discretion.

“The bridging loan is a temporary loan expected to be repaid once a long-term project financing is secured at a later date,” it said.

The group does not expect the execution of the bridging loan to have any material effect on its earnings for the current financial year ending Dec 31, 2018.

PetChem shares closed unchanged at RM8.15 yesterday, with a market capitalisation of RM65.28 billion. Over the past 12 months, the counter has gained about 13.63%.