Riyadh – Mubasher: State-owned Saudi Aramco is close to completing its acquisition of a 70% stake in the Saudi Basic Industries Corp. (SABIC), however payment for the deal could stagger, Saudi energy minister Khalid Al-Falih has said.
Aramco is currently negotiating with the Public Investment Fund (PIF) over how it would pay for PIF’s 70% stake in SABIC, Bloomberg reported, citing Al-Falih as saying. He indicated that Aramco may pay for the transaction on installments.
"If the payment terms are extended over a period of time that allows us to pay for a lot of it with self-generated cash," the Saudi official noted.
In the event that the acquisition comes to fruition, the majority stake in SABIC would enhance Aramco’s downstream portfolio and accordingly support the firm at a time of low oil prices, while also generating close $70 billion for PIF.
"Aramco is the most profitable company in the planet," Al-Falih added. "Our costs are in the neighbourhood of $4 a barrel, so it has the capacity to generate a lot cash."
In July, the world’s largest oil firm commenced negotiations with PIF over a controlling stake in SABIC, which could reach up to 70% of the petrochemical maker.
Earlier this month, Aramco said it was seeking advisers to mandate a large loan for its potential acquisition of PIF’s stake in SABIC.
