Under the deal, Aramco and Sumitomo Chemical will each provide $702 million in financing to PetroRabigh and waive $1.5 billion in loans, the statement said.
The deal reduces Sumitomo Chemical’s stake in the joint venture to 15 percent while increasing Aramco’s stake to 60 percent.
The two companies said the financing and loan forgiveness are part of a plan they intend to explore with PetroRabigh.
They added that the plan also includes initiatives to modernize the refinery’s operation with the aim of helping to improve business profitability.
They explained that the deal is in line with Saudi Aramco’s expansion into downstream activities and Sumitomo Chemical’s move away from basic chemicals towards specialty chemicals.
Sumitomo Chemical said in a separate statement it is preparing to book a pretax loss of 27 billion yen ($183 million) in the July-September quarter as a result of the deal, adding that it is sticking to its annual profit forecast it announced in April.
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