SIPCHEM ANNOUNCES THE SIGNING OF AN AGREEMENT TO ACQUIRE THE EQUITIES INVESTMENT OF IKARUS IN THE ACETYLS COMPLEX

Sipchem announces the signing of an agreement to acquire the equities investment of Ikarus Petroleum Industries Company (Kuwaiti Company) in two of its Sipchem affiliates, namely, International Acetyl Company (11%) and International Vinyl Acetate Company (11%) on Tuesday June 23, 2015, for an estimated value of US$ 100.2 million (SAR 375.8 million). The purchase would be conditional on obtaining the approval of the concerned authorities and other parties. Both companies operates a plant for a production of Acetic Acid and Acetic Anhydride and Vinyl Acetate Monomer, the plants located in Jubail Industrial City. Sipchem intends to finance the acquisition through its own resources in addition to Islamic Financing Facilities.

The process of acquisition and financial impact of such equities investment is targeted to be completed during the third quarter of 2015.

It is worth mentioning that Sipchem currently owns 76% equity in each of International Acetyl Company and International Vinyl Acetate Company. After the completion of this transaction, Sipchem equity in both companies would increase to 87% in each of the two companies with no change in the ownership percentages of the remaining partners. Any relevant updates on the same subject will be announced later.

Ahmad A. Al-Ohali, CEO, Sipchem, stated this transaction comes in line with the Sipchem growth strategy to enhance its equity investment in its affiliates to increase Sipchem profits and shareholders value. The Acetyls products are an integral part of Sipchem portfolio that serves the downstream industry and have major applications in the construction materials, ink, paints and solvents manufacturing and many other important products.