Kuwait plans to offer to the public the shares in Kuwaiti joint ventures which U.S. petrochemicals giant Dow Chemical Co plans to sell off, state news agency KUNA quoted a senior Kuwaiti executive as saying.
Dow Chemical announced last week that as part of a $7-$8.5 billion divestiture plan, it would reduce its equity positions in all of its Kuwaiti ventures, in order to release capital for other strategic purposes. It did not give details.
The U.S. company’s investments in Kuwait include a stake in EQUATE, a tie-up with the Kuwaiti government’s Petrochemical Industries Co (PIC) and two other local partners, Boubyan Petrochemical Co and Qurain Petrochemical Industries Company. EQUATE produces over five million tonnes of petrochemical products annually.
KUNA quoted PIC’s chief executive Asaad al-Saad as telling a news conference that the shares which Dow Chemical divested would be offered to Kuwaiti citizens in initial public offers.
He did not elaborate on how these offers would work or when they would occur. Consultants will be hired to assess the size of Dow Chemical’s assets in Kuwait, and the U.S. firm will remain a strategic partner of PIC, he said.
Dow Chemical’s other joint ventures in the country include Kuwait Olefins Co, which owns an ethane cracker and an ethylene glycol production unit, and Kuwait Styrene Co, which makes styrene monomer.
In the last several months, Kuwait’s government has shown renewed interest in offering shares in state-controlled assets to the public, as a way to share the country’s oil wealth with its citizens and impose market more discipline on companies.
Last month sovereign wealth fund Kuwait Investment Authority said it had decided to resume selling stakes in big local firms to the public, aiming to offer its stake in Kuwait Investment Co in the first half of 2015.
Dow Chemical has had a sometimes rocky relationship with PIC; last year it received $2.2 billion in damages from PIC after an international arbitrator ruled against the Kuwaiti firm for pulling out of a planned plastics joint venture in 2008.
However, Saad denied the dispute had anything to do with Dow Chemical’s divestment decision, KUNA reported.