Saudi Aramco halts plan for massive corporate-bond sale: WSJ

      Published on Thursday, 22 November , 2018      61 Views     
Saudi Aramco halts plan for massive corporate-bond sale: WSJ


Saudi Arabia‘s oil giant Aramco has shelved plans to embark on a massive corporate-bond sale to fund a $70bn stake in the kingdom’s national petrochemical firm, a news report said.



Looking instead at options requiring less public disclosure, people familiar with the matter told the Wall Street Journal on Monday that Aramco executives have soured on the initiative.

Saudi Arabian Oil Co, as the company is officially known, was considering issuing up to $40bn in bonds to help buy 70 percent of Saudi Basic Industries Corp (SABIC), the Journal reported.

Aramco has been in talks with banks to acquire a controlling stake in the Saudi petrochemical maker, a deal that could require up to $70bn in financing.

Controlled by the state, SABIC is also the country’s largest publicly listed company with a market cap of about $100bn.

Corporate secrets?

A corporate bond sale on international markets typically requires public disclosure of three years of audited financial statements as well as any potential obstacles. Aramco is known not to offer analysts such detailed company information.

Aramco executives are also concerned that market conditions aren’t ideal for bond sales, the newspaper reported, and they are now looking at a combination of other potential financing options.

Over the past month oil prices have fallen more than 20 percent. Saudi Arabia plans to boost prices with a production cut – but uncertainty remains.

Saudi-led OPEC and its allies including Russia decided in June to relax output curbs in place since 2017, after pressure from US President Donald Trump to reduce oil prices and make up for supply losses from Iran.

Forecasts of a 2019 supply surplus and slowing demand have also dented the market.

IPO no show

Aramco, the world’s largest crude oil producer, plans to boost investment in refining and petrochemicals in a bid to cut reliance on crude as demand for oil slows.

The move to quit the corporate-bond sale was the latest setback for Aramco after the Saudi government’s plan to place up to five percent of the company on the stock market also stalled.

The planned listing was to be the cornerstone of the kingdom’s promised economic overhaul and, at a targeted $100bn, the biggest IPO ever.

It was the brainchild of 32-year-old Crown Prince Mohammed bin Salman, also known as MBS, the heir apparent of the world’s largest oil exporter.



Saudi Energy Minister Khalid al-Falih has said the government was committed to conducting the IPO at an unspecified date in the future.

Keywords:
Category Business | 2018/11/22 latest update at 4:00 AM
Source : Al Jazeera | Photocredit : Google
62 Views
Comments Add comment



Related Articles

The editorial staff of Saudi Arabia Today would like to give all of its readers from Gulf and Saudi Arabia and the whole world the opportunity to participate actively in the development of the website! If you have something interesting, fun, scandalous - just something worth to be seen from more people. Capture it and share it in the Saudi Arabia Today with a short text.

Do you have information you want to reach our readers?

Send article/s

You can subscribe to our Facebook, Twitter and Google pages or use our RSS feed channel to always read the most important news about Saudi Arabia, the Gulf and the world.


Sponsored Publications



Saudi Alhokair’s mall unit files for IPO, offering in second quarter: sources
Saudi Arabia Saudi Arabia news

Saudi Alhokair’s mall unit files for IPO, offering in second quarter: sources

Saudi Arabia’s Fawaz Alhokair Group plans to offer shares in its shopping malls business in Riyadh in the…

Saudi Arabia new rules

Property prices continue to fall in key UAE markets

UAE banks invest Dh87 billion in Saudi Arabia, Egypt

King Salman receives dignitaries in Riyadh King

King Salman receives dignitaries in Riyadh

The Kingdom’s Grand Mufti Sheikh Abdul Aziz Al-Asheikh, senior scholars, ministers and a group of citizens called on…

Saudi King Salman reshapes country’s political and security affairs council King

Saudi King Salman reshapes country’s political and security affairs council

Saudi King Salman on Thursday announced a new list of appointees to key positions in the country’s political…

Saudi Arabia’s Prince Talal bin Abdulaziz has died King

Saudi Arabia’s Prince Talal bin Abdulaziz has died

Saudi Arabia’s Prince Talal bin Abdulaziz passed away on Saturday, family members and Saudi media said on Twitter.…

Bahraini crown prince meets Saudi officials in Riyadh King

Bahraini crown prince meets Saudi officials in Riyadh

Bahrain Crown Prince Salman bin Hamad Al-Khalifa held talks with Saudi officials in Riyadh this week. His visit…

GULF TV

Popular in GULF TV

PIRELLI “DREAMING” – THE CAL 2019 making of Full Version | Fashion Channel

1906 Views

A photographic tale of the aspirations of four women and their determination to achieve their goals, each one…

Latest videos in GULF TV

Events

Lifestyle

Culture

Sport

Science & Technology

Government