Linklaters advises on SAR2.5billion petrochemicals complex

Farabi Yanbu Petrochemicals Company (FYPC), a subsidiary of Farabi Petrochemicals Company (FPC), has signed a 2.15bn riyals Islamic financing agreement for the construction of a new petrochemicals complex on the Red Sea coast in Yanbu, Saudi Arabia. This follows the signing of a 1.2bn riyals loan agreement between FYPC and the Saudi Industrial Development Fund in October 2018.

The complex is designed to manufacture 650,000 metric tonnes per annum of petrochemical products. Between 60-70% of this output will comprise the production of linear alkyl benzene (LAB) and normal paraffins, with the remaining 30-40% of products produced being derivative products.

Production is scheduled to commence in the first quarter of 2020.

Sarosh Mewawalla, Projects partner at Linklaters, says:

“Farabi Petrochemicals Company goes from strength to strength and we are proud to have supported their subsidiary, Farabi Yanbu Petrochemicals Company, on this successful landmark financing in the Kingdom. This marks the beginning of the resurgence of the petrochemicals sector in the Kingdom and will see Farabi become a global leader in LAB production.”
The major commercial lenders are Banque Saudi Fransi, Samba Financial Group, The National Commercial Bank and The Saudi British Bank. 

Linklaters LLP and Zamakhchary & Co. acted as legal advisors to FPC & FYPC with a team led by Projects partner Sarosh Mewawalla and managing associate Ashley Halewood. Linklaters has partnered with clients in Saudi Arabia for more than 15 years, to help them grow their businesses both in the Kingdom and around the world.  The firm is at forefront of developments in the Kingdom, giving us an insight into the market that few other law firms can replicate. This insight, combined with our global experience and knowhow means we are ideally placed to advise corporates, financial institutions and governments on their complex ground-breaking transactions.