Saudi Arabia’s National Industrialization Co., known as Tasnee, agreed terms with lenders to refinance around 6 billion riyals ($1.6 billion) of debt at its titanium unit after a slump in commodity prices, according to people with knowledge of the matter.

The new debt will have a duration of three years -- with the option to extend to five years -- and is priced at 275 basis points above the Saudi Interbank Offered Rate, the people said asking not to be identified as the information is private. Tasnee is expected to sign the new agreement in the next few weeks, they said.

The company hired HSBC Holdings Plc’s Saudi Arabia unit to advise on the refinancing after a slump in titanium dioxide prices contributed to the company’s 1.4 billion-riyal loss last year, people with knowledge of the matter said in March. The company returned to profit in the three months through June -- after five consecutive quarters of losses -- as titanium dioxide prices began to recover and costs fell.

Cristal manufactures titanium products used in the aerospace, automotive and medical industries and also makes titanium dioxide ingredients used in paint, plastics and paper. A spokesman for Tasnee didn’t respond to requests to comment.

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