Saudi Aramco's debt is expected breach target levels as an oil price collapse triggered by the coronavirus forces it to borrow to meet the world's largest dividend pledge and buy a major stake in petrochemicals maker SABIC, analysts said.
LONDON - Saudi Aramco’s debt is expected breach target levels as an oil price collapse triggered by the coronavirus forces it to borrow to meet the world’s largest dividend pledge and buy a major stake in petrochemicals maker SABIC, analysts said.
On Tuesday, it reported $16.6 billion in profits in the first quarter, more than double the combined profits of the top five western oil and gas companies, as the impact of the coronavirus-related travel restrictions began to be felt.But, although Aramco amassed $15 billion in cash, that was not enough to pay its $18.8 billion dividend for the quarter, when global benchmark Brent crude oil prices averaged $50 a barrel.
Also last year, it agreed to acquire a controlling stake in Saudi petrochemicals maker SABIC, a deal it is seeking to restructure following the collapse in oil prices, sources told Reuters on Sunday. “If the government wants Aramco to pay $75 billion in dividends, it will do so by re-leveraging its balance sheet,” Adolff said.
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