The Saudi Arabian public petroleum and natural gas company Saudi Aramco plans for a finance package up to $10 billion that it could offer buyers of its pipeline business unit as the company seeks to extract value from its assets in an era of lower oil prices.
The company is in talks with banks to provide “staple financing”, which is a financing package provided by the seller that buyers can use to back their purchase.
Global investment companies like Brookfield Asset Management, BlackRock and KKR, which could invest in the pipeline business, are in talks with lenders for a possible finance.
The loan could possibly be up to $10 billion, the planned pipeline sale would be similar to infrastructure deals signed over by the past two years by Abu Dhabi’s national oil company ADNOC, which raised billions of dollars by leasing its oil and gas pipeline assets to investors.
Saudi Aramco, the world’s biggest oil company, had completed the largest initial public offering in 2019 raising a staggering $25.6 billion, and later it sold shares, taking the total to $29.4 billion.
To transform the economy, the funds were transferred to the Public Investment Fund (PIF) Saudi Arabia’s sovereign wealth fund. As the society struggles with climate change and shifts from fossil fuel towards lower carbon energy.
The profits of Saudi Aramco has plunged previous year, but it stuck to a guaranteed $75billion annual dividend, most of which goes to the government.
Mohammed bin Salman, The crown prince of Saudi Arabia said:
Saudi Aramco will sell more shares in the following years to bolster PIF’s coffers.
