Energy giant Saudi Aramco said Monday it had hired banks to sell dollar-denominated bonds, to boost finances as the coronavirus pandemic weighs heavily on global demand for crude oil.
This comes two weeks after the company, seen as Saudi Arabia‘s main cash cow, posted a 44.6% slump in third-quarter profit compared to the same time last year.
Aramco said in a statement its multi-tranche offering will range between three and 50 years, subject to market conditions. It did not specify the total value, which is expected to be in the billions.
The company said it had hired the banks Citi, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley and NCB Capital.
Aramco has said it is committed to a bumper dividend even as third-quarter net profits dropped to 44.21 billion Saudi riyals ($11.79 billion) compared to $21.3 billion in the same period last year.
Aramco’s net profit for the first nine months of this year also dropped, by 48.6% to $35.02 billion, the company said.
Although the results underscore a downbeat market, Aramco’s July-September results showed an improvement amid relatively steady crude prices compared to the second quarter, when it posted a profit of $6.57 billion.
The latest results stood in contrast to the losses reported by Aramco’s rivals, which are also reeling from pandemic-driven economic shutdowns that have suppressed energy demand.
Saudi Arabia has been hit hard by the double blow of low oil prices and sharp production cuts.
A drop in oil income is expected to hinder Crown Prince Mohammed bin Salman’s ambitious “Vision 2030” reform program to overhaul the kingdom’s energy-reliant economy.
Source : Daily Sabah