Raising Loan for S-Oil
The Korea Development Bank (KDB) announced on Nov. 30 that it has succeeded in arranging a syndicated loan of 2.1 trillion won (US$1.81 billion) to set up a new petrochemical complex in S-Oil's Onsan Refinery in Ulsan.
The project is to construct a petroleum residue decomposition facility and an olefin upgrading facility. It costs 5 trillion won (US$4.32 billion) in total – 1.9 trillion won (US$1.64 billion) of S-Oil’s internal funds and 3.1 trillion won (US$2.68 billion) of debts. Of the 3.1 trillion won debts, 2.1 trillion won (US$1.81 billion) will be raised through the syndicated loan, while the remaining 1 trillion won (US$863.56 million) will be financed by corporate bonds.
The KDB decided to directly invest 700 billion won (US$604.49 million) in the project by using corporate investment promotion programs. The creditor group consists of nine large financial institutions at home and abroad, including the KDB, Kookmin Bank, KEB Hana Bank, Shinhan Bank, the Bank of Communications in China and Hanwha Insurance.
An official from the KDB said, “As Chinese banks take part in the local Korean won contract with a large amount of money, the syndicated creditor group has become diversified. Using the corporate investment promotion programs, the KDB also directly participated in the project with 700 billion won (US$604.49 million). The keynote of domestic banks’ conservative risk management, the bank provided the chance to contribute to activating business investment.”