Saudi chemicals group SABIC studies strategic options for its gas unit
SABIC is exploring various options, including an initial public offering, for its National Industrial Gases Company to enhance financial position and shareholder value.
DUBAI: Saudi chemicals group SABIC announced on Wednesday that it is considering strategic alternatives for its National Industrial Gases Company (GAS), as part of a comprehensive review of the company's operations.
The potential initial public offering (IPO) aims to improve SABIC's financial standing and increase value for shareholders, in line with the organization's strategy focused on portfolio optimization and core business enhancement.
SABIC, which is majority-owned by oil major Saudi Aramco and ranks among the world's leading petrochemical companies, reported a net loss of $323 million in its first-quarter results due to rising operating costs and high feedstock expenses.
As a response, SABIC has been implementing measures such as cost-cutting initiatives and exploring new investment opportunities.
Previously this year, the company also initiated restructuring efforts for key assets and divested from non-core businesses, including its stakes in Aluminium Bahrain (Alba) and steel business Hadeed, which were sold to other Saudi state-backed entities.
The decision to study strategic options for GAS comes amidst a challenging environment within the chemicals industry, characterized by weak demand and high input costs.
Consequently, SABIC's stock has experienced a decline of 16.3 percent since the beginning of the year, according to data from LSEG (London Stock Exchange Group).
SABIC emphasized that the ongoing evaluation process will involve thorough financial, technical, regulatory, and economic assessments for each option under consideration.
The company remains committed to enhancing its financial position and shareholder value through strategic decisions aligned with its long-term goals.
The potential initial public offering (IPO) aims to improve SABIC's financial standing and increase value for shareholders, in line with the organization's strategy focused on portfolio optimization and core business enhancement.
SABIC, which is majority-owned by oil major Saudi Aramco and ranks among the world's leading petrochemical companies, reported a net loss of $323 million in its first-quarter results due to rising operating costs and high feedstock expenses.
As a response, SABIC has been implementing measures such as cost-cutting initiatives and exploring new investment opportunities.
Previously this year, the company also initiated restructuring efforts for key assets and divested from non-core businesses, including its stakes in Aluminium Bahrain (Alba) and steel business Hadeed, which were sold to other Saudi state-backed entities.
The decision to study strategic options for GAS comes amidst a challenging environment within the chemicals industry, characterized by weak demand and high input costs.
Consequently, SABIC's stock has experienced a decline of 16.3 percent since the beginning of the year, according to data from LSEG (London Stock Exchange Group).
SABIC emphasized that the ongoing evaluation process will involve thorough financial, technical, regulatory, and economic assessments for each option under consideration.
The company remains committed to enhancing its financial position and shareholder value through strategic decisions aligned with its long-term goals.
