Aramco to buy PetroRabigh stake for $700 million from Sumitomo
All proceeds received by Sumitomo from the sale will be injected into PetroRabigh
Saudi Aramco agreed to buy an additional stake in PetroRabigh from its joint venture partner Sumitomo Chemical Co. for $702 million. PetroRabigh shares rose the most since 2021.
Aramco will acquire 22.5 per cent of Rabigh Refining and Petrochemical Co. from the Japanese company, taking its stake to 60 per cent and Sumitomo Chemical's to 15 per cent, according to a statement Wednesday.
PetroRabigh's stock jumped as much as 10 per cent, the biggest intraday gain since December 2021, and paring this year's decline to 22 per cent. The shares were trading at 8.14 riyals on Wednesday, moving above Aramco's purchase price of 7 riyals apiece.
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The deal helped counter PetroRabigh reporting a second-quarter loss of SR1.1 billion ($293 million) on Wednesday.
All proceeds received by Sumitomo from the sale will be injected into PetroRabigh. Aramco will also provide an additional $702 million to improve the firm's financial position, according to the statement.
Aramco and Sumitomo also agreed to waive loans of $750m each, helping reduce PetroRabigh's liabilities.
PetroRabigh operates a refining and petrochemical complex located on Saudi Arabia's west coast and produces a variety of refined petroleum and petrochemical products, such as heavy and light oil, naphtha and kerosene.