PIF seeks up to US$8b to fund new investments
RIYADH: Saudi Arabia’s sovereign wealth fund has started preliminary talks with banks to raise a loan expected to be between US$5 billion and US$8 billion (RM20.57 billion and RM32.92 billion) as it seeks funding for new investments to diversify the kingdom’s economy, said sources.
The Public Investment Fund (PIF) is looking for a bridge loan that will be fully underwritten by lenders and would be repaid with proceeds from the US$69.1 billion sale of its stake in Saudi Basic Industries Corp (Sabic) to Saudi Aramco, said the people.
Talks with banks were at an early stage and the final size of the loan would depend on their response, said the people.
A PIF spokesman said its funding strategy included “four sources of finance, including capital injections and asset transfers by the government, retained investment returns, and loans and debt instruments”.
PIF is a central part of the government’s effort to wean the economy away from oil under a plan known as Vision 2030.
The fund aims to control more than US$2 trillion by that date and currently has assets of about US$290 billion, according to data from the Sovereign Wealth Fund Institute.
Last year, the fund raised US$11 billion from a group of international banks in its first-ever borrowing.
Aramco, the world’s largest oil company, last week debuted in the international capital markets to fund part of the Sabic acquisition, issuing US$12 billion of bonds.
Aramco would pay for half of the Sabic stake when the deal closes this year and the rest over the subsequent two years.