Saudi Aramco could issue $10bn bond to fund Sabic acquisition

Saudi Arabia's energy minister, Khalid Al-Falih, reportedly said Aramco has plans to tap the bond market in Q2 2019

Khalid Al-Falih, Saudi Arabia's energy minister, gave an estimate on the size of the bond Saudi Aramco plans to issue to fund its acquisition of a controlling stake in Sabic
Khalid Al-Falih, Saudi Arabia's energy minister, gave an estimate on the size of the bond Saudi Aramco plans to issue to fund its acquisition of a controlling stake in Sabic

Saudi Arabian Energy Minister Khalid Al-Falih said that Saudi Aramco could issue a $10bn bond to fund its pending acquisition of a controlling stake in Saudi petrochemicals giant Sabic.

Al-Falih told reporters in Abu Dhabi that the size of the bond would be decided in the coming few weeks, noting that "it will probably be in about the 10bn range," Bloomberg reported.

“The bond issue is intended to give Aramco multiple sources of capital,” Al-Falih said, according to Reuters

“With or without the SABIC transaction a company the size of Aramco--its capital program and its capital spend is going to be from $40bn to $50bn a year--it’s very prudent they have access to the capital market.”

Saudi Aramco is planning to purchase a 70% stake in Sabic from the Public Investment Fund, and Saudi Crown Prince Mohammed bin Salman said in October that Aramco would IPO by 2021, to wait for the Sabic deal to go through. Meanwhile Saudi Aramco CEO Amin Nasser has repeatedly emphasised the importance of the deal as the company looks to expand its downstream portfolio.

“Our downstream business ventures will provide a reliable destination for Saudi Aramco’s future oil production, and diversify both the company’s business portfolio and the Kingdom’s economy,” Nasser said in his keynote address at the Gulf Petrochemicals and Chemicals Association (GPCA) Forum in November 2018.

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