Saudi Aramco begins its first dollar-denominated Islamic bond sale

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RIYADH: Saudi Aramco on Monday started its first dollar-denominated Islamic bond sale, state media stated, because the vitality big seeks to boost money to fund its hefty dividend funds.

The sale of sukuk, or Islamic bonds compliant with the Muslim religion, will finish on June 17, the official Saudi Press Agency stated, with out specifying how a lot money Aramco is searching for to boost.

The sale comes after two earlier bond choices that weren’t compliant with Islamic legislation — a debut $12 billion sale in 2019 and an $8 billion providing in November final 12 months.

The firm is elevating cash to assist pay an annual dividend of $75 billion, a key income supply for the Saudi authorities, Aramco’s largest shareholder.

Aramco, the dominion’s money cow, pledged to pay the dividend when it sought to generate curiosity in its debut preliminary public providing on the Saudi bourse in December 2019.

But firm funds got here below strain final 12 months, when crude costs tanked because the coronavirus pandemic sapped international demand.

Last month, Aramco declared a 30 p.c soar in first quarter revenue, due to a restoration in oil costs, however the firm’s free money stream fell in need of the $18.75 billion dividend obligation for that interval.

Aramco is pushing to boost money as Riyadh faces a ballooning funds deficit and pursues multi-billion greenback initiatives to diversify its oil-reliant financial system.

In April, Aramco stated it had struck a $12.4-billion deal to promote a minority stake in a newly fashioned oil pipeline enterprise to a consortium led by US-based EIG Global Energy Partners.

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