Saudi Aramco plans to raise fund from asset sales

By Rahul Vaimal, Associate Editor
Saudi Aramco
Representational Image

Saudi Arabia’s multinational petroleum and natural gas company is planning to raise billions of dollars from investors by selling stakes in some subsidiaries, according to sources related to the matter.

Saudi Aramco, the world’s biggest oil company, is looking to follow Abu Dhabi National Oil Company’s strategy to raise funds and it has already hired the global investment bank Moelis & Co to draw plans for selling shares.

The oil company aims to raise around $10 billion from a share sale in Aramco’s pipelines, according to a person familiar with the matter. Moelis and Aramco declined to comment.

Gulf economies have been accelerating their efforts to attract more investment. Early this year, Abu Dhabi National Oil Company (ADNOC) raised more than $15 billion from the likes of Apollo Global Management, Brookfield Asset Management and Singapore’s sovereign wealth fund.

ADNOC, the third-biggest producer of OPEC, has sold shares in its fuel-retail arm and leasing rights for properties and natural-gas pipelines. Since 2016, the company has followed such a transformation strategy to make it more commercially-focused and technology-enabled.

In December 2019, when Aramco raised about $30 billion from its initial public offering which took two years to complete, many bankers opinionated that ADONC’s share selling strategy was the quicker option.

Last month Aramco issued $8 billion of bonds to fund the world’s biggest dividend, its executives have said they want to lower the company’s leverage after its $69 billion acquisition of chemical marker Saudi Basic Industries Corp (SABIC) this year.

The energy firm has held talks with investment banks including JP Morgan Chase & Co to help with a stake sale in the pipeline business.

In August Aramco had reshuffled its senior management team and developed a division focused on portfolio optimization to look at the company’s existing assets as it adjusts to weaker energy prices.

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