Industries Qatar to fund the new PVC project announced by QVC and later become direct shareholder in QVC with a larger stake 

Doha, Qatar, 4 October 2022 – The Board of Directors of Industries Qatar (“IQ” or “the Group”; QE ticker: IQCD) has approved signing of a ‘Principles Agreement’, whereby IQ will be funding the construction of new Polyvinyl Chloride (PVC) plant announced during April 2022 by its indirect joint venture - Qatar Vinyl Company Q.P.J.S.C. (QVC), and later would become a direct shareholder in QVC with a larger stake, following the expiry of the current joint venture agreement (JVA). 

Funding of the new PVC plant

During April 2022, an EPC contract was awarded for a new PVC plant, and the plant’s construction is expected to be completed by mid-2025. As per the Principles Agreement, the total CAPEX outlay relating to the new PVC plant will be shared between IQ and Mesaieed Petrochemical Company (MPHC) in a ratio of 44.8% and 55.2%, respectively; equivalent to their share in QVC based on a new JVA. The project funding for IQ’s share will be made from its Group’s existing sources of free cash, ensuring an efficient and effective use of liquidity. 

QVC’s ownership restructuring upon expiry of the current JVA

QVC’s JVA is expiring on 1st May 2026, upon which IQ will assume direct ownership in QVC with a larger shareholding percentage, with immediate effect. Qatar Petrochemical Company Q.P.J.S.C. (QAPCO) will continue to operate QVC, including the new PVC plant, under a plant operating and services agreement.

Currently, IQ owns an indirect stake in QVC via QAPCO, equivalent to 25.52%.  As per the Principles Agreement, QAPCO and QatarEnergy will transfer their entire stakes in QVC to IQ at the expiry of QVC’s current JVA at nil consideration. 

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