Thursday 06, September 2018 by Kudakwashe

Saudi Aramco in preliminary talks on debt deal

 

The financing discussions are expected to get underway next week after Public Investment Fund (PIF) signs an $11 billion five-year syndicated loan.

Saudi Aramco is in preliminary talks with banks about a potential debt financing of up to $70 billion to back its acquisition of a majority stake in SABIC, reported Reuters.

The move follows Saudi Arabia’s postponement of its plans to raise $100 billion by listing five per cent of Aramco in 2019, which would have been the biggest IPO ever.

Aramco seeks to buy a strategic stake in SABIC, the world’s fourth-biggest petrochemicals company, from the Kingdom’s sovereign wealth fund, which owns a 70 per cent stake worth around $70 billion.

Bankers involved in the debt deal said that a potential financing of $50 to $70 billion is possible, and a deal of this size would set a new record for the region, giving the sovereign PIF cash to fund Saudi’s Vision 2030 plan to diversify its oil-dependent economy.

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