World News | Saudi Aramco to Issue Bonds as It Seeks Cash Amid Oil Slump
Get latest articles and stories on World at LatestLY. Saudi Arabia's oil giant Aramco announced Monday it will issue international bonds as it seeks a cash infusion to help pay for billions of dollars in dividends the company promised shareholders before the global coronavirus pandemic sent oil prices plummeting.
Dubai, Nov 16 (AP) Saudi Arabia's oil giant Aramco announced Monday it will issue international bonds as it seeks a cash infusion to help pay for billions of dollars in dividends the company promised shareholders before the global coronavirus pandemic sent oil prices plummeting.
In a statement posted on the Saudi Tadawul stock exchange, the company said it plans to issue US.dollar denominated bonds but did not specify the size of the issuance. The bonds, which range from three to 50 years, are targeted to institutional investors with a minimum subscription of USD 200,000.
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The amount issued and the returns are subject to market conditions, the company said.
Aramco floated a sliver of the company last year as part of an ambitious plan by Crown Prince Mohammed bin Salman to divert those earnings toward investments that can help fuel the kingdom's growth as he tries to steer the economy away from its dependence on oil revenue for survival.
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Prince Mohammed sought to encourage Saudi citizens and investors to buy Aramco shares and push up the company's valuation for its stock market debut by promising an annual payout of at least USD 75 billion.
Even so, almost all of this dividend money goes to the company's majority owner, the Saudi government, to help cover state spending.
Monday's announcement to issue bonds is aimed at raising capital needed to pay the promised dividends, which at USD 18.75 billion a quarter exceeds Aramco's current cash flow. (AP)
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)