Saudi Aramco Issues International Bonds to Pay Shareholders
The Saudi Arabian oil company Saudi Aramco on Monday announced that it would issue dollar-denominated international bonds to pay shareholders. The world’s largest oil company, it went partially public only in December in one of the most ballyhooed IPOs in history. The company did not say how large the issuance would be, although numerous reports speculated that it would run into the billions. The issuance of the bonds is meant to help the company pay out some $75 billion in dividends promised to shareholders by Crown Prince Mohammed bin Salman, who is working to move the country’s economy away from its dependence on oil revenue. The company’s largest shareholder remains the Saudi government. Oil prices have crashed this year due to the coronavirus pandemic, which lowered the global demand for oil. Aramco’s earnings fell by 50% in the first half of 2020, according to the Associated Press, and Saudi Arabia has cut its oil production in a bid to prevent prices from continuing to fall. Saudi Aramco has exclusive rights to produce and sell Saudi Arabia’s energy reserves.