Page 11 - EurOil Week 05 2023

EurOil INVESTMENT EurOil

Petkim obtains $300mn 3-year loan

from JP Morgan at SOFR+5.60% for

eurobond redemption

TURKEY PETROCHEMICAL producer Petkim STAR Refinery for a consideration of $720mn.
(PETKM), a unit of Azerbaijan-controlled Socar Accordingly, Petkim was to deliver the pay-
Petkim used the loan to Turkey, has obtained a $300mn three-year loan ment in three equal instalments of $240mn. The
redeem Eurobonds. from JPMorgan (New York/JPM) at the cost of first instalment was to be delivered when the
the guaranteed overnight financing rate (SOFR) agreement was signed.
plus 5.60%, Petkim said on January 26. The second instalment was to be deliv-
As of January 26, 12-month SOFR stood ered when the trial process at the refinery was
at 4.83%. In June 2023, SOFR is to replace the launched. And, the last payment was to be deliv-
current USD-benchmark London Interbank ered when the share transfer was completed.
Offered Rate (Libor). One-year Libor currently Also in 2018, Petkim sold the eurobonds in
stands at over 5%. question to deliver the first two payments, but it
Petkim used the loan to on January 26 is delaying the last payment.
redeem $500mn of five-year eurobonds On December 30, Petkim said that it
(XS1747548532), which paid a 5.875% coupon. once more delayed the repayment of the last
Socar Turkey was launched in 2006 by the instalment, this time to October 2023, due to
State Oil Company of the Azerbaijan Republic unfavourable developments in petrochem-
(Socar). It has a 51% stake in Petkim, while the ical markets and its eurobond redemption
remaining 49% is listed on Borsa Istanbul. obligation.
Petkim has a B/Negative, five notches below Due to payments for the STAR Refinery stake,
investment grade, from Fitch Ratings and a B3/ Petkim has not distributed dividends since 2017.
Stable, six notches below investment grade, from STAR, launched in 2018, has an annual
Moody’s Investors Service. Petkim’s ratings are in capacity of 11mn tonnes. It processes Azeri
line with Turkey’s sovereign ratings. Light, Kirkuk and Urals-type crude oil. It is
In 2018, Petkim signed an agreement with located on the “Petkim peninsula” in Aliaga,
Socar Turkey to acquire an 18% indirect stake in near Izmir, on the Aegean coast.

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