Neste Oil is to sell its 10% holding in the Saudi European Petrochemical Company Ibn Zahr to Saudi Basic Industries Corporation (SABIC) for USD 120 million. Neste Oil will book a capital gain on the sale of approximately EUR 85 million. The companies expect to close the deal during the second quarter of 2006.
Following the transaction, SABIC will own 80% of Ibn Zahr shares and the remaining shareholders, Apicorp and Ecofuel SpA, 10% each. Neste Oil has been a shareholder in Ibn Zahr since its foundation in December 1984. The company, which produces the gasoline component, MTBE, and polypropylene, is located in Al Jubail on the eastern coast of Saudi Arabia.
"Ibn Zahr is a well-run and highly profitable company, and Neste Oil has been happy to be a long-term owner. More recently, however, Ibn Zahr's strategy has moved the company more and more towards petrochemicals, whereas Neste Oil's strategy is to concentrate on producing and marketing high-quality fuels for cleaner traffic. This has caused us to re-evaluate our position, and led eventually to the transaction announced today," says Neste Oil's President & CEO, Risto Rinne.
Neste Oil Corporation
Senior Vice President, Communications
Kimmo Rahkamo, Executive Vice President, Components, Neste Oil, tel. +358 50 458 4247
Neste Oil Corporation is an independent Northern European oil refining and marketing company, with a focus on advanced fuels for cleaner traffic. Neste Oil's refineries are located in Porvoo and Naantali in Finland, and have a total refining capacity of approx. 250,000 bbl/d. The company employs around 4,500 people. Neste Oil is listed on the Helsinki Stock Exchange (symbol: NES1V). For further information, see www.nesteoil.com.