Saudi Arabia’s Public Investment Fund (PIF) has granted Kayan Petrochemical Co a 4 billion riyals ($1.1 billion) loan to help finance an industrial complex, Kayan’s chief executive said.

Sabic, which owns a stake in Kayan, is helping set up the $10 billion project with Kayan in the industrial city of Jubail on the kingdom’s Gulf coast.
Government-owned PIF’s loan is part of the $6 billion Sabic said last year would be raised to finance the Kayan project. The rest of the financing is being arranged, CEO Mutlaq Al-Morished said.
“PIF granted Kayan the four billion riyal loan, which will be added to $4.8 billion we are raising in Islamic and commercial loans with five banks,” he said.
“We expect to complete the financing of the complex in the second half of this year,” he added.
He said HSBC, French bank BNP-Paribas, ABN-Amro, Bahrain’s Arab Banking Corporation and Saudi Samba bank were arranging the loan.
With an annual production capacity of more than four million tonnes, the complex will produce ethylene, propylene and other chemicals mainly for export to Asian nations such as China and India. It will be complete in 2009.
Kayan raised 6.75 billion riyals in an initial public offering. Investors offered almost four times more than Kayan was seeking to raise, an arranging bank said.
The IPO attracted about 32 billion riyals of offers, Samba Financial Group chief executive Eisa al-Eisa told Al Arabiya television. Some 3.6 million subscribers bought shares in the IPO, Eisa said.
The offering had been only 35 per cent covered in the eighth day of a 10-day offer period.
The offering, equivalent to 45 per cent of the company’s share capital, was only open to Saudi Arabia’s 17.5 million nationals.
The biggest Gulf Arab IPO was in 2003 when the Saudi government sold a stake in Saudi Telecom Co for $2.72 billion.
Saudi Finance Minister Ibrahim Al-Assaf said that the IPO’s success would encourage future IPOs.
“The IPO creates optimism about the future of share offers as well as the Saudi economy,” he said.