Saudi Aramco Seeks $ 7.5 Billion Loan For Pipeline Investors By Bloomberg

© Bloomberg. Juaymah Tank Farm at Saudi Aramco’s Ras Tanura Oil Terminal and Refinery in Ras Tanura, Saudi Arabia Photographer: Simon Dawson / Bloomberg

(Bloomberg) – Saudi Aramco (SE 🙂 is preparing a loan of about $ 7.5 billion for potential investors in its pipelines, according to people familiar with the matter. The world’s largest oil producer has started talks with lenders to secure favorable terms for the financing package that would later be offered to investors, said the people, who asked not to be identified because the information is private. The discussions take place in parallel with the sale of a stake in a pipeline unit, which could raise about $ 10 billion for Aramco, the people said. A pipeline deal would be the first phase of Aramco’s strategy to raise money by selling leasing rights or stakes in non-core assets, reflecting what Abu Dhabi National Oil Co. has done in recent years. The Saudi company is working with advisers including JPMorgan Chase & Co. (NYSE 🙂 and Moelis (NYSE 🙂 & Co., the Wall Street investment bank that also participates in the Adnoc deals. Aramco declined to comment. Adnoc, which pumps most of the oil and gas in the United Arab Emirates, has generated more than $ 15 billion from companies including Apollo Global Management (NYSE 🙂 Inc., Brookfield Asset Management Inc. and the Singapore sovereign wealth fund. . The company sold shares of its fuel retail arm and property and gas pipeline lease rights. Aramco, which for years had only minimal corporate debt, is increasingly turning to new sources of funding as it seeks to sustain annual dividend payments of $ 75 billion at a time of lower oil prices. Most of those payments go to the Saudi state, which needs the money to finance its budget. The company went public in Riyadh at the end of 2019, but is still 98% owned by the government. The company’s leverage, a measure of debt to equity, has risen to 21.8%, above its target range of 5% to 15%. Debt also increased because it took out loans to pay for the $ 69 billion acquisition of Saudi Basic Industries Corp., a local chemicals manufacturer, last year. (Updates with details of the list in the penultimate paragraph). © 2021 Bloomberg LP

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