Saudi Arabia's sovereign fund secures $11b loan
Published on: Tuesday, September 18, 2018
RIYADH: Saudi Arabia's sovereign wealth fund said Monday it had secured its first ever international loan, boosting the kingdom's diversification drive after its flotation of state oil giant Aramco stalled.The Public Investment Fund said in a statement that it had obtained an $11 billion (9.4 billion euro) loan as "the first step in its strategic, medium-term debt funding programme"."We are pleased to have completed this international syndicated loan", the fund's Managing Director Yasir al-Rumayyan said.
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The PIF had previously sought to raise billions of dollars through an initial public offering of shares in Aramco to fund projects that seek to reduce the kingdom's dependence on oil.Diversification is a key focus of Crown Prince Mohammed bin Salman's Vision 2030 plan, which aims to transform the Saudi economy through a slew of projects from hi-tech start-ups to a new mega city. But the Aramco IPO, once touted by Saudi officials as aiming to raise $100 billion, has hit the buffers, with executives at the oil giant citing unfavourable market conditions. That prompted the PIF to turn to other sources to fund its programmes.
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The fund said that under the Future Investment Initiative launched in October 2017, it aims to beef up its assets to $400 billion by 2020.Its current holdings are estimated at $230 billion, mostly in the form of major stakes in companies including Sabic petrochemicals, Saudi Arabia's largest listed firm.
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The PIF is in talks to sell its 70-percent stake in SABIC to Aramco for an estimated $70 billion as another way of raising cash.Stay up-to-date by following Daily Express’s Telegram channel.
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