Lead banks work to shift Evonik unit loan

MOSCOW (MRC) -- Lead banks are in talks with private debt funds and family offices to shift excess paper on a €1.8bn buyout financing for German chemicals group Evonik’s methacrylates plastics unit, Madrid, that they are stuck with and are considering launching a second syndication process, banking sources said, said Reuters.

Evonik agreed to sell its clear acrylic sheet unit to Advent International for EUR3bn in March, backed with a EUR1.785bn-equivalent euro- and dollar-denominated leveraged loan financing.

It was increased by €21m prior to closing in June, to cover some of the issue discount on the loan after it priced at 500bp over Euribor/Libor at 95 OID, having struggled during syndication as investors shy away from cyclical businesses.

It is unclear how much of the loan the arranging banks were stuck with prior to close but at one point it was EUR500m, sources said.

The lead banks on the deal — Barclays, Deutsche Bank and Goldman Sachs — are now coordinating the sell down process and are holding talks with private debt funds and family offices, to offload the paper.

Advent was not immediately available to comment. It is unusual for underwriters to approach this money directly but it has become more commonplace of late on difficult deals that haven’t found a natural home with CLOs and credit funds – the typical buyers of syndicated leveraged loans.

In June, Bank of Americal Merrill Lynch sold to direct lenders a EUR300m term loan backing Platinum Equity’s acquisition of a majority stake in Spain’s frozen fish producer Iberconsa.
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MOSCOW (MRC) -- China Petroleum and Chemical Corp, known as Sinopec Corp, said it has set up a fuel oil company in Sri Lanka as it looks to supply fuel to ships along a major maritime route, reported Reuters.

The new unit, called Fuel Oil Sri Lanka Co Ltd, has been registered in Hambantota on the southern tip of the country, according to a report on the website of Sinopec Group, parent of Sinopec Corp.

Fuel oil is a refined product mostly used as bunker fuel for ships and is also burned in power stations.

The move marks the latest investment in Sri Lanka by China, which sees the South Asian island nation as a pivotal part of its Belt and Road Initiative infrastructure plan.

Sinopec stressed the strategic location of Hambantota port on the Indian Ocean along a key shipping route between the Suez Canal and the Malacca Strait, which is transited by two-thirds of global oil shipments. The market to supply fuel to ships had "huge" potential, it said.

In March, India’s Accord Group and Oman’s Ministry of Oil and Gas signed a USD3.85 billion deal to build a 200,000 barrel-per-day oil refinery near Hambantota port, in the biggest single pledge of foreign direct investment ever made in Sri Lanka.

China Merchants Port Holdings, China Harbour Engineering Corp and other Chinese companies are investors in the port and industrial zone.

Sinopec has set a company-wide target of 10 million tonnes of production capacity by 2020 to supply low-sulfur bunker fuels that meet the cleaner emission standards set by the International Maritime Organization (IMO).

As MRC wrote previously, in Septermber 2018, Sinopec Corp joined a group planning to build an oil refinery in Alberta, an enterprise that would strengthen demand for the Canadian province's heavily discounted crude. Thus, Sinopec along with an Alberta indigenous group, China State Construction Engineering Corp and Alberta management company Teedrum, plan to build a refinery to process 167,000 barrels per day of crude into gasoline and other products.

Sinopec Corp. is one of the largest scale integrated energy and chemical company with upstream, midstream and downstream operations. Its principal business includes: exploring, developing, producing and trading crude oil and natural gas; producing, storing, transporting and distributing and marketing petroleum products, petrochemical products, synthetic fiber, fertilizer and other chemical products. Its refining capacity and ethylene capacity rank No.2 and No.4 globally. Sinopec listed in Hong Kong, New York, London and Shanghai in August 2001. Sinopec Group, the parent company of Sinopec Corp., is ranked the 5th in Fortune Global 500 in 2012.
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MOSCOW (MRC) -- Petrofac has inaugurated its construction skills training centre in Hassi Messaoud, Southern Algeria, following the completion of a programme to upgrade the centre’s facilities, said Hydrocarbonprocessing.

The centre will provide training for the next generation of Algeria’s oil and gas industry workforce, with a capacity to train up to 400 Algerian delegates annually. The centre was designed, built and will be operated by Petrofac, as part of the company’s commitment to the development of local skills. Petrofac has been active in Algeria since 1997, with more than 85% of its in-country workforce sourced locally.

The training centre’s facilities include modern, well equipped, air-conditioned classrooms and large open workshops with state-of-the art equipment. The curriculum covers five specialist trade areas – Instrumentation, Electrical, Mechanical, Pipework and Welding – all with a strong emphasis on health and safety. An applied training methodology will provide students with the theoretical knowledge and essential practical skills they need to work in their chosen professional discipline upon graduation.

The inauguration ceremony, which included a guided tour of the facilities, was attended by local government and authority representatives, along with officials from the oil and gas industry.

Graham Mac Millan, Senior Vice President – North Africa, said: “We are delighted to mark the relaunch and modernisation of this important facility which will deliver best-in-class technical training for the young people of Algeria. The first group of 45 trainees are now developing vital construction skills at the centre. Training enables Petrofac to transfer the company’s deep knowledge and experience in key trades to the local supply chain, which consequently improves the safety and quality of our own projects and of those throughout Algeria. Petrofac is an active and engaged company, and we are keen to participate in future developments in Algeria and maintain our longstanding presence in-country."
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MOSCOW (MRC) -- Dr Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of the Abu Dhabi National Oil Company (ADNOC) met with Alexander Novak, Minister of Energy of the Russian Federation, during a visit to Moscow, as ADNOC explores opportunities to expand its strategic partnership and investment base across its entire value chain, said Hydrocarbonprocessing.

During the meeting, Dr Al Jaber conveyed the greetings of the UAE leadership to the government and people of Russia and reaffirmed the deep-rooted ties between both countries, stressing the keenness of the UAE to strengthen bilateral relations. Bilateral trade between Russia and the UAE topped 11 billion AED last year, a 21% increase on the previous year. Relations were further strengthened last year when Sheikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces met President Putin and both leaders signed a declaration of strategic partnership covering political, security and economic spheres.

In this meeting, Dr Al Jaber noted his appreciation for Russia’s role in the OPEC/ Non OPEC Cooperation Agreement, which continues to have a positive impact on balancing oil markets. Dr Al Jaber elaborated on ADNOC’s ongoing transformation, centred on maximising value, and expanding the company’s strategic partnership base to stay ahead of the world’s growing demand for energy.

Dr Al Jaber said: “This visit reflects the strong and friendly ties between the UAE and Russia. As our countries continue to build on strong trade relations, there is significant potential for collaboration in the energy sector. ADNOC is open to exploring partnership and co-investment opportunities with Russian energy companies across the full value chain where they make economic sense and drive significant returns for both sides.

"As we respond to the evolving energy landscape, driven by growing demand particularly in Asia, ADNOC is forging ties with new partners from around the world, who share our creative vision and are prepared to put skin in the game through capital, technology and market access."
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MOSCOW (MRC) -- LyondellBasell has announced the final results of its "modified Dutch Auction" tender offer, which expired one minute after 11:59 p.m., New York City time, on July 8, 2019, as per the company's press release.

Based on the final count by Computershare Trust Company, N.A., the depositary for the tender offer (the "Depositary"), a total of 35,144,596 shares of LyondellBasell's ordinary shares, EUR0.04 par value per share, were properly tendered and not properly withdrawn at or below the purchase price of USD88.00 per share.

LyondellBasell has accepted for purchase 35,144,596 shares at a price of $88.00 per share, for an aggregate cost of approximately USD3.09 billion, excluding fees and expenses relating to the tender offer. These shares represent approximately 9.5 percent of the shares outstanding as of July 8, 2019.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC acted as dealer managers for the tender offer.

As MRC reported previously, in August 2016, LyondellBasell made the final investment decision to build a high density polyethylene (HDPE) plant on the US Gulf Coast. The plant will have an annual capacity of 1.1 billion pounds (500,000 metric tons) and will be the first commercial plant to employ LyondellBasell's new proprietary Hyperzone PE technology. The start-up of the new plant is scheduled for 2019.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
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