Saudi Aramco seeks $ 7.5 billion loan for pipeline investors

(MENAFN– Gulf Times) Saudi Aramco is lining up an estimated $ 7.5 billion loan 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 financial package that would then be offered to investors, the people said, asking not to be identified because the information is private. The talks are taking place alongside the sale of a stake in a pipeline unit, which could bring in around $ 10 billion to Aramco, the sources said.
A pipeline deal would be the first phase of Aramco’s strategy to raise funds by selling lease rights or stakes in non-core assets, much like the Abu Dhabi National Oil Co has done during the last years. The Saudi firm works with advisers such as JPMorgan Chase & Co and Moelis & Co, the Wall Street investment bank which is also involved in Adnoc transactions.
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 Apollo Global Management Inc, Brookfield Asset Management Inc and the Singapore sovereign wealth fund. The company sold shares in its fuel retail arm and lease rights to properties and gas pipelines.
Aramco, which for years maintained minimal corporate debt, increasingly taps into new sources of funding as it seeks to maintain annual dividend payments of $ 75 billion in an era of falling oil prices. Most of these payments go to the Saudi state, which needs money to finance its budget.
The company listed 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, rose to 21.8%, above its target range of 5% to 15%. Debt also rose because it took out loans to pay for a $ 69 billion acquisition of Saudi Basic Industries Corp, a local chemicals maker, last year.


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