NKNKH can refuse dividends for the sake of a $7,8bn project
As Bloomberg writes, Nizhnekamskneftekhim PJSC that has paid record dividends recently can refuse them next year due to its plans to construct an ethylene complex for $7,8bn.
15% of costs of complex paid by means of shareholders and own money
'Next year dividends won't be paid or only a minimum part of them will be expended,' Albert Shigabutdinov, the director general of TG TAIF, which is a controlling shareholder the third largest butyl rubber producer in the world, told in an interview in Kazan (on poster).
Albert Shigabutdinov told that in the future NKNKH will allocate over 30% of its net profit to dividends. TAIF that holds almost 52,4% of common stocks of NKNKH, hopes it will happen 'no later than 2020', when two first production stages of the complex are put into operation. The press service of NKNKH did not answer calls and a written media request.
Nizhnekamskneftekhim that paid almost 8bn rubles last year can finance the project partially by means of reduced payments to its shareholders. The project will enable to increase the volume of ethylene production. As Albert Shigabutdinov told, the company is planning to finance 15% of the cost of the ethylene complex by means of the shareholders and its own money. The rest of the financing will be executed with the help of loans.
Nizhnekamskneftekhim can consider an additional stock emission as a fallback position in order to finance the project. 'This armoured train has a reserve way if there is money deficit or markets will be in decline,' he noted. 'First of all, stocks will be offered to the existing shareholders.
The shares of NKNKH on the Moscow Exchange has gone up by over 30% since the beginning of the year. The company's capitalisation accounts for $1,5bn or a fifth of the ethylene project cost.
A call and a request made in the press centre of Tatneft PJSC that holds a bit less than 25% of common stocks of NKNKH remained unanswered.
Bank loans
According to Albert Shigabutdinov, TAIF is going to take out about a third of the loans for the construction of the complex in banks of the Russian Federation, and the rest of them will be borrowed under guarantees of export and credit agencies. NKNKH hopes to obtain guarantees of foreign agencies with the help of foreign contractors who will participate in the construction of the complex. The director general of TAIF said NKNKH plans to finish the tender for the construction of the first production stage till 1 October and sign contracts till 15 December.
The capacity of the ethylene complex will be 1,2m tonnes per year. He told the construction of the first production stage with an annual capacity of 600,000 tonnes is due to start in June 2017. Albert Shigabutdinov told it will be 'much cheaper' than the declared $3bn but refused to announce more accurate numbers.
The first and second stages will be put into operation at the same time by 2020. Shigabutdinov told the construction of the third stage can start by the middle of 2018 and the fourth – by the middle of 2019. The launch of the last production stage won't take place 'until 2023', he informed.