Business | Banking

Aramco, Dow plan to drop troubled RBS

Saudi Aramco and the Dow Chemical Company of the US are seriously considering dropping the cash-strapped Royal Bank of Scotland (RBS) as project financing manager of their joint venture industrial facility in Ras Tanura in eastern Saudi Arabia, according to well-informed sources.

  • By Abdul Rahman Shaheen, Correspondent
  • Published: 22:41 February 17, 2009
  • Gulf News

Riyadh: Saudi Aramco and the Dow Chemical Company of the US are seriously considering dropping the cash-strapped Royal Bank of Scotland (RBS) as project financing manager of their joint venture industrial facility in Ras Tanura in eastern Saudi Arabia, according to well-informed sources.

This was after reports appeared showing that the bank is facing acute cash-crunch as an aftermath of the global financial crisis. Saudi Aramco and Dow joined hands in establishing the construction, ownership and operation of a world-scale chemicals and plastics production complex, named the Ras Tanura Integrated Project.

The two companies later appointed a consortium led by RBS to arrange loans worth $22 billion (Dh80.80 billion) to finance the project.

Saudi Aramco and Dow are now considering transferring the lead role of RBS to another bank to manage project financing, the sources said.

RBS, Britain's biggest government-controlled bank, announced that it posted a record loss of $30 billion during the last year, thus becoming one of the biggest losers in the banking history of the United Kingdom. This was mainly attributed to the bank's more write-downs on assets affected by the credit crunch.

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