IPIC Secures $5b for Petrochem Acquisitions |
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ABU DHABI - The International Petroleum Investment Company, an investment arm of the Abu Dhabi government, has borrowed a $5 billion syndicated loan to help pay for its acquisition of Canada's largest chemical maker and to substantially boost it stake in Spain's Compañia Española de Petroleos.
The investment company, known as IPIC, also will use some of the money to help refinance an existing €975 million ($1.38 billion) bridge loan coming due this month, it said in a statement.
IPIC is the emirate's main vehicle for worldwide oil and gas investments, with a portfolio of assets currently valued at around $20 billion. IPIC Managing Director Khadem Al Qubaisi said in January that the company aimed to boost its holdings by seeking to benefit from falling asset prices.
IPIC agreed earlier to buy Nova Chemicals of Canada for $499 million in cash and to pay $4.4 billion to increase its stake in Compañia Española de Petroleos, or Cepsa, to 47 per cent from 9.5 per cent.
The Canadian chemical and plastics manufacturer had expected to complete its sale to IPIC by June 30. Due to a request by the Canadian government's industry department to review the deal, the completion date was extended to Monday, July 6, Nova said last week.
Much of IPIC's new loan will go toward financing the purchase of 32.5 per cent of Cepsa shares that are owned by Banco Santander, S.A, and an additional five per cent of Cepsa shares held by Union Fenosa, S.A. The Bank of Tokyo-Mitsubishi UFJ Limited, HSBC Bank Middle East Limited and Banco Santander, S.A. arranged the syndicated term loan, which will be split equally into two parts of $2.5 billion each.
The first tranche is a one-year bridge facility that IPIC expects to refinance with bond sales. It will pay annual interest at 250 basis points above the London interbank offered rate, or LIBOR, for the first six months and a 400 basis-point spread in the last three months.
The second tranche is a two-year term loan with a one-year extension option at each lender's discretion. It will pay an interest margin of 350 basis points.
haseebhaider@khaleejtimes.com
© Khaleej Times 2009
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