Austrian energy group OMV AG has announced plans to issue a new bond issue of up to €1.5 billion ($1.8 billion) over the next 12 months to partially finance the acquisition of plastics producer Borealis, Reuters reports.

Prior to the crisis caused by the coronavirus pandemic (COVID-19), OMV signed an agreement with Mubadala to increase its stake in Borealis to 75% in a $4.68 billion deal. It would be the largest transaction in OMV’s history, analysts say, and will strengthen the company’s position in the industry and in the Middle East.

Mubadala, Abu Dhabi’s sovereign wealth fund, owns 64% of Borealis, while OMV’s stake is 36%. In turn, Mubadala is the second largest shareholder in OMV, after the Austrian state. “The potential new issue of hybrid bonds will not have a maturity date and could be repurchased by OMV on certain dates and under certain conditions,” said the statement of the Austrian energy group quoted by Agerpres.

In March, the financial rating agency Fitch downgraded the outlook for long-term debt to Austrian energy group OMV AG from stable to negative and maintained the rating at “A minus”. Attributing a negative outlook could lead to a downgrade. The rating review comes after OMV announced it had signed an agreement with Mubadala to increase its stake in Borealis, Fitch said.

The transaction will lead to a significant increase in the debt of the Austrian energy group, amid lower commodity prices, reduced demand for hydrocarbons and the failure of the OPEC+ alliance to reach an agreement on declining oil production, the agency said.

Borealis AG is an Austrian chemical company that in 2019 had sales of 9.8 billion euros and a net profit of 872 million euros.