Petro Rabigh Chairman expects Class B shares to strengthen financial position, protect shareholders’ equity

Ibrahim Al-Buainain, Chairman of Rabigh Refining & Petrochemical Co. (Petro Rabigh)

Ibrahim Al-Buainain, Chairman of Rabigh Refining and Petrochemical Co. (Petro Rabigh), said the company’s newly announced capital increase plan will bolster financial stability and long-term growth, allowing it to raise funds from founding shareholders while minimizing the impact on existing shareholders’ ownership and control.

Speaking to Al Ekhbariya TV, Al-Buainain explained that the issuance of Class B shares provides a strategic tool to reinforce the company’s balance sheet.

The structure is the first of its kind in the Saudi market, tailored to Petro Rabigh’s circumstances and reflecting an innovative approach to capital restructuring, the Chairman explained.

Al-Buainain noted that high debt levels have been one of the company’s main challenges in recent years. To address this, founding shareholders Saudi Aramco and Sumitomo waived a $1.5 billion loan and pledged to inject $1.4 billion through the planned Class B issuance, pending the shareholders’ approval.

Together with regular repayments, these measures are expected to lower Petro Rabigh’s total debt to around $4 billion by year-end—its lowest level in a decade. This will cut financing costs, improve cash flows, and provide flexibility to invest in future growth opportunities.

According to Argaam data, Petro Rabigh’s board recommended a 31.5% capital increase, or SAR 5.26 billion, in favor of the founding shareholders, followed by a capital reduction from SAR 21.97 billion to SAR 16.71 billion to offset accumulated losses.

Petro Rabigh reported a net loss of SAR 2.1 billion for H1 2025, compared with SAR 2.5 billion a year earlier. Second-quarter losses reached SAR 1.4 billion, while accumulated losses stood at SAR 7.34 billion as of June 30, representing 43.9% of capital.