Kuwait’s Equate Petrochemical Co. has chosen banks to arrange for a $6bn loan, about half of which will be used to pay for its acquisition of petrochemical company MEGlobal from Dow Chemical.
‘Sources with knowledge of the matter’ told Reuters on Monday that Equate has picked JP Morgan Chase , Citigroup , HSBC , Kuwait Finance House and National Bank of Kuwait as arrangers for the loan.
The money raised through the bridge loan would also be used to refinance Equate’s existing debt and for general corporate purposes, the sources said.
The banks involved in the loan deal have sent invitations to other local and international banks to consider participating in it, the sources said.
The $6bn loan would be one of the largest corporate loans arranged in Kuwait in the past few years. It also provides more evidence that Gulf state-linked companies are seeking to raise money from the capital markets as low oil prices make it more difficult to obtain money from the government.
Equate signed a deal on Thursday to buy MEGlobal from Dow Chemical and Petrochemical Industries Co, part of state-run Kuwait Petroleum, for $3.2bn.
Dow Chemical has said it would reduce its equity holdings in all of its Kuwaiti ventures to release capital for other strategic purposes.
Equate is owned 42.5% each by Dow and Petrochemical Industries Co. Boubyan Petrochemical owns 9 % of Equate.
Dow Chemical has said it would eventually cut its stake in Equate and the Kuwaiti government said last year that it planned to offer the shares relinquished by Dow to the public.
