Page 8 - DMEA Week 05 2023

DMEA COMPANIES DMEA

Petkim obtains $300mn

3-year loan from JP Morgan

TURKEY PETROCHEMICALS producer Petkim Star, launched in 2018, has an annual capacity
(PETKM), a unit of Socar Turkey, has obtained a of 11mn tonnes. It processes Azeri Light, Kerkuk
$300mn worth of three-year loan from JPMor- and Urals type crude oil. It is located in the Pet-
gan (New York/JPM) at a cost of the guaranteed kim peninsula in Aliaga town of Izmir on the
overnight financing rate (SOFR) plus 5.60%, Pet- Aegean coast.
kim said on January 26. It produces 1.6mn tonnes of naphtha for Pet-
As of January 26, 12-month SOFR stood kim along with 1.6mn tonnes of jet fuel, 4.8mn
at 4.83%. In June 2023, SOFR is to replace the tonnes of diesel fuel, 700,000 tonnes of petro-
current USD-benchmark London Interbank leum coke, 420,000 tonnes of mixed xylene,
Offered Rate (Libor). One-year Libor currently 480,000 tonnes of reformate and 160,000 tonnes
stands at over 5%. of sulphur.
Petkim has used the loan to on January Turkey has two oil refiners. Tupras (TUPRS),
26 redeem $500mn of five-year eurobonds a unit of Koc Holding (KCHOL), is Star’s sole
(XS1747548532), which paid 5.875% coupon. domestic peer. It has an annual production
Socar Turkey was launched in 2006 by the capacity of 30mn tonnes.
State Oil Company of the Azerbaijan Republic Petkim, launched in 1965 by Turkey’s state-
(Socar). It has a 51% stake in Petkim while the owned Turkish Petroleum Corporation (TPAO)
remaining 49% is listed on Borsa Istanbul. as a state-owned enterprise (SOE), produces
Petkim has a B/Negative, five notches below ethylene, polyethylene, polyvinyl chloride and
investment grade, by Fitch Ratings and a B3/ polypropylene.
Stable, six notches below investment grade, by In 1990, a 4% stake in Petkim was sold in an
Moody’s Investors Service. Petkim’s ratings are initial public offering (IPO). In 2005, another
in line with Turkey’s sovereign ratings. 38% stake was sold in a secondary public offer-
In 2018, Petkim signed an agreement with ing (SPO).
Socar Turkey to acquire an 18% indirect stake In 2008, a 51% majority stake in Petkim was
in Star Refinery for a consideration of $720mn. sold to a JV set up by Socar, Turkish conglomer-
Accordingly, Petkim would deliver the pay- ate Aksoy Holding’s Turcas Petrol (TRCAS) and
ment in three equal instalments of $240mn. First Saudi Arabia’s Injaz.
instalment would be delivered when the agree- In 2012, Socar bought Turcas’ indirect stake
ment was signed. in Petkim. In 2014, Turcas also sold its take in
Second instalment would be delivered when Star Refinery to Socar.
testing process at the refinery would be launched. In 2015, Socar sold a 13% stake in Socar Tur-
And, the last payment would be delivered when key to Goldman Sachs (New York/GS).
the share transfer is completed. In 2021, Goldman Sachs exercised its $1.3bn
Also in 2018, Petkim sold the eurobonds in put option (right to sell) for its stake in Socar
question to deliver the first two payments while Turkey. As a result, Socar is currently the sole
it is still delaying the last payment. owner of Socar Turkey.
On December 30, Petkim said that it delayed Also in 2021, Goldman exercised a $300mn
again the repayment of the last instalment to put option for its 30% stake in Petlim, Petkim’s
October 2023 due to unfavourable develop- integrated port on the Aegean. Petkim holds the
ments in petrochemicals markets and its obliga- remaining 70% in Petlim.
tion of eurobond redemption. Socar Turkey also operates two natural gas
Due to payments for the Star Refinery stake, grids in Bursa and Kayseri along with Trans-Ana-
Petkim has not distributed dividends since 2017. tolian Natural Gas Pipeline (TANAP).™

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