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.