Saudi Aramco, PIF amend terms of payment for SABIC acquisition
Saudi Aramco said it has agreed to change the terms of payment related to its acquisition of a 70 percent stake in Saudi Arabia Basic Industries Corp (SABIC) by issuing four bonds to fund a portion of the deal.
Aramco said the seller loan will be secured by four separate bonds, issued by the oil company to Saudi Arabia’s sovereign fund, the Public Investment Fund (PIF).
The company said that 36 percent of the purchase price – which could be adjusted for certain expenses – will be paid in cash, while 64 percent will be paid in the form of a seller loan. Therefore, the proceeds to the fund in the form of cash will amount to $500 million, and the five additional bonds will be worth $2.5 billion.
Earlier this year, the oil giant signed a $69 billion deal with the PIF to take a majority shareholding in the Kingdom’s largest petrochemicals company.
The deal to acquire a stake in SABIC is expected to boost Saudi Aramco’s chemicals and refining businesses and make it more attractive to investors ahead of a highly-anticipated intial public offering (IPO), which was formally announced on Sunday.