* Refinery used to export half its sugar to Saudi Arabia
* Start-up costs contributed to debt burden (Adds details, quotes)
By Maha El Dahan
DUBAI, Feb 12 (Reuters) - Bahrain’s Arabian Sugar Refinery stopped production in October and is preparing for a change of ownership, a source close to the matter told Reuters on Sunday.
Bahrain’s only sugar refinery, which came on stream in 2014, did not have enough working capital to continue operations for now, the source said.
An Omani businessman who owns a sugar mill in Tanzania has made an offer for the refinery but nothing has been decided, the source said.
The offer made by the businessman was favoured by the refinery’s financiers who were primarily Gulf-based lenders, another source with knowledge said.
The offer for the refinery was estimated to be at most $100 million, the second source said.
The refinery has struggled to recoup start-up costs and has clocked up large debts which include energy expenses - all of which would be common for any new refinery until it is able to boost throughput and capture more market share.
The first source said it was more likely that the government would take it over, or existing shareholders could ultimately buy the business.
“Most probably, there will be a government takeover,” the source said.
Arabian Sugar Refinery used to export around half of its production to Saudi Arabia. Its other export markets included Kuwait and Qatar. (Additional reporting by Jonathan Saul; Editing by Susan Fenton and Stephen Powell)