SINGAPORE, Nov. 7 --The International Finance Corporation (IFC) signed agreements in Singapore today to lend US$500 million to Thai Petrochemical Industry Public Company Limited (TPI), one of Thailand’s leading producers of petrochemicals. The IFC financing will support TPI’s major expansion project in Rayong Province on Thailand’s eastern seaboard.
Total project cost is estimated at US$2,043 million with final completion by mid-1998. The expansion project will make TPI the first integrated, crude-oil-based, petrochemicals producer in Southeast Asia. The project consists of a new upstream splitter with a throughput of 65,000 barrels per day of condensate and crude; a steam cracker with a capacity of 360,000 tonnes per year of ethylene; new and expanded intermediate and downstream plants to produce styrene monomer, polystyrene, polypropylene and ABS; and investments in receiving facilities and storage tanks for crude oil, as well as petroleum products distribution.
The IFC financing package of US$500 million includes US$100 million for IFC’s own account -- an 11-year senior loan of US$80 million together with a convertible loan of US$20 million. In addition, an IFC US$400 million B loan with a nine-year final maturity has been syndicated among a total of 41 international financial institutions. The B loan is IFC’s largest-ever syndication in any country.
The B loan was originally underwritten at US$300 million by CBA Asia Ltd., Dresdner (South East Asia) Ltd., Korea Long Term Credit Bank, and Sanwa International Finance Ltd. In general syndication, the B loan was increased to US$400 million. Including the underwriters, the 41 participants are comprised of 20 Asian and 18 European lenders, together with two from Australia and one from the US (list attached).
TPI was founded in 1978 by members of the Leophairatana family. Beginning with a low density polyethylene plant in 1982, TPI has become one of the country’s leading producers of polymers with total consolidated assets, as of June 1996, of about US$3.4 billion and net worth of about US$1.4 billion. Its stock is listed on the Stock Exchange of Thailand.
Given rapidly growing domestic and regional markets, TPI’s expanded output will enable it to diversify its product mix to take advantage of market opportunities. By integrating upstream, TPI will reduce its dependency on third-party supplies of petrochemical feedstocks whose price and availability have been much more volatile than those of crude oil.
Mr. Prachai Leophairatana, CEO of TPI and one of its original founders, said at the loan signing in Singapore: “TPI is proud to have taken this major step towards full integration. We operate in fast-growing but highly competitive markets where success goes to the lowest-cost producers. With our own source of petrochemical feedstocks and a low capital cost for the project since it uses our existing infrastructure, we aim to compete strongly in Asian markets and to be a major export earner for Thailand. The long-term IFC loans provide TPI with the maturities and flexibility required at this stage of our development.”
Mr. Jean-Philippe Halphen, Director of IFC’s Chemicals, Petrochemicals and Fertilizers Department, said: “This integrated, world-scale investment by TPI represents a major milestone in Thailand’s industrial development. TPI will become a reliable, low-cost, high-quality, long-term supplier of polymers to Thailand and the region’s rapidly expanding manufacturing base. We are particularly delighted that so many international banks have joined us in this record-breaking syndication.”
IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
List of Banks Participating in the IFC Syndicated Loan to TPI:
I. Underwriters
CBA Asia Limited
Korea Long Term Credit Bank
Dresdner (South East Asia) Limited
Sanwa International Finance Limited
II. Participants (By amount of participation)
CBA Asia Limited
Korea Long Term Credit Bank
Dresdner (South East Asia) Limited
Norddeutsche Landesbank Girozentrale
The Sanwa Bank, Limited
Bayerische Landesbank Girozentrale, Singapore Branch
ABN-AMRO Bank N.V.
Commerzbank Aktiengesellschaft, Singapore Branch
DG BANK Deutsche Genossenschaftsbank
ING Bank N.V., Singapore Branch
Mediocredito Centrale S.p.A.
Landesbank Sachsen Girozentrale
Banque Worms, Singapore Branch
Industrial Bank of Korea
ANZ Singapore Limited
Asian Finance and Investment Corporation Ltd
Banque et Caisse d’Epargne de l’Etat, Luxembourg
Berliner Bank Aktiengesellschaft
Boram Bank
Chase Manhattan (S.E.A.) Limited
Creditanstalt-Bankverein
Daedong Bank
The Daegu Bank, Ltd.
DongNam Bank
Hanil Bank
Landesbank Rheinland-Pfalz Girozentrale
Maybank, New York Branch
The Mitsubishi Trust and Banking Corporation, Hong Kong Branch
Mitsui Leasing (Panama) S.A.
Orix Asia Limited
The Toyo Trust and Banking Company, Limited, Singapore Branch
Union Européenne de CIC, Singapore Branch
De Nationale Investeringsbank Asia Ltd Asian Banking Corporation
Kangwon Bank
KDLC Lease & Finance Limited
Korean French Banking Corporation - SOGEKO
Kumho Merchant Bank
Landesbank Schleswig-Holstein Girozentrale
P.T. Bank Expor Impor Indonesia (Persero), Paris Branch
Seoul (Asia) Finance Limited
