Chemanol just announced that the Saudi Industrial Development Fund (SIDF) has approved the restructuring of debt balances owed by Chemanol to the fund worth SAR385 million.. According to the announcement, the payments will be divided over 9 instalments, ranging between SAR25 million and SAR50 million. The statement added that the first payment for the loan will be due on 13 January 2017 with the last payment due on 2 October 2020.   The move to restructure Chemanol's debts comes as no surprise to us given the bleak operating environment (Chemanol is currently loss making) as well as the company’s overleveraged balance sheet. While this move does alleviate some liquidity pressure off Chemanol, we believe that more such moves are needed in order for the company to meet its debt obligations as i) total gross debt stood at SAR1.02 billion at the end of 2015 (the company still has cSAR328 million due to a consortium of banks by December 2017 as well as SAR329 million in overdrafts); and as ii) the outlook for future cash flows seems weak. Overall, we continue to be sellers of the stock and continue to hold a negative view on operations as well as balance sheet liquidity. (Tadawul, Ahmed Hazem Maher) Chemanol: SAR5.42 as of 7 February 2016, Rating: Sell, FV: SAR8.00 per share, MCap: USD174 million, CHEMANOL AB / 2001.SE