Petronas Chemicals said on Monday it had inked an agreement with Saudi Aramco’s unit Aramco Overseas Holdings Coöperatief U.A.(AOHC) to divest half of its 100% stake last Friday.
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 started operations since the date of incorporation.
Based on the latest audited financial statements of PRPC Polymers for FY ended Dec 31, 2016 it has not generated any operating income, and recorded net loss of RM57mil. PRPC Polymers’s net assets are RM1.3bil.
“Petronas Chemicals will share the project and operation risk with Saudi Aramco upon divesting 50% of the equity interest and 50% of the shareholder loans in PRPC Polymers to AOHC,” it said.
Saudi Aramco will supply up to 70% of crude supply to PRPC RC, which eventually will lead to the sustainability of feedstock supply from PRPC RC to PRPC Polymers.
“Petronas Chemicals will have a positive cash flow impact by decreasing its capex commitment as a result of Saudi Aramco’s 50% participation in PRPC Polymers. Subsequently, it will provide PCG with the financial flexibility to pursue other strategic growth projects.
“Petronas Chemicals will be able to leverage on Saudi Aramco’s experiences in execution, implementation and operation of similar large scale and integrated petrochemical projects, e.g., Sadara Chemical Company.
“The divestment will also provide Petronas Chemicals with the potential opportunity to pursue future strategic collaborations with Saudi Aramco,” it said.