Saudi Aramco is negotiating a $10bn loan with banks to “fund acquisitions and other investments”, media reports have claimed.
Once finalised, the credit will replace Aramco’s existing $4bn loan, due to mature end of this year, with an amount more than twice its size making it the largest financing agreement in the GCC since 2011, according to data from Bloomberg.Â
The company is negotiating to receive the loan in four parts with $6bn and $2bn due to be delivered two periods of five years and another two tranches of $1bn over two periods of one year each, accoridng to a Bloomberg report.Â
A potential use for the loan will be to fund an acquisition of a stake in Germany’s chemical company Lanxess, which has a market value of $4.7bn. For the deal, Aramco is competing with Russia’s NKNK, Reuters said earlier last month.Â
“Aramco has been seeking to make inroads into more advanced chemicals to diversify away from its oil and basic petrochemicals businesses, and Chief Executive Khalid al-Falih told a conference in Riyadh last month that it was “even more committed today to diversifying and investing in new sectors” despite the impact of oil price declines,” it added.Â
