Saudi Aramco is hoping to obtain billions of dollars in cheap loans from financial institutions looking to strengthen ties with the oil major before its stock market listing, banking and export credit agency (ECA) sources told Reuters.
Citigroup, Standard Chartered and Sumitomo Mitsui Banking Corporation were providing advice on the transactions, which could generate up to $6 billion, all with ECA backing.
The desire to raise funds suggests Saudi Arabia is keen to make sure what could represent the world’s biggest initial public offering (IPO) goes ahead this year, despite speculation that sale plans might be frozen or even scrapped.
The loans will offer minimal profits but sources told Reuters the banks hoped to secure more work as the kingdom proceeds with selling up to 5 per cent of Aramco in an IPO that could value the firm at $2 trillion.
It is also thought Aramco is keen to secure the loans prior to going public, after which, the firm loses its status as a state-owned entity and would have to pay more for credit.
Citi was said to be advising Aramco for loans backed by British and US ECAs, Standard Chartered was providing assistance on ECA funding from continental Europe and Sumitomo Mitsui Banking Corporation was targeting transactions backed by Asian ECAs, the sources said.