Saudi Arabia's Public Investment Fund (PIF) is planning to raise between $6 billion and $8 billion from banks to help support the Kingdom’s economic transformation plans, Reuters reported, citing sources familiar with the matter.
The PIF issued a request for proposals to banks several weeks ago about raising money for a syndicated loan, but the deal not expected to close before September, sources told the news agency.
The proceeds from the loan would be used for general corporate purposes, they added.
Although financing details have not yet been confirmed, banks anticipate “tight pricing” as PIF seeks to build relationships with lenders.
As part of its expanded role, PIF is also seeking to fund more of its expansion through loans and other debt instruments. It also plans to form "a core group of banks to offer some of those services."
The potential proceeds are likely to be used for general investment activities, since PIF set a goal in 2017 of increasing its asset portfolio to SAR 1.5 trillion ($400 billion) by 2020, sources added.
PIF is likely to potentially receive billions of dollars as part of plans by Saudi Aramco to acquire its stake in Saudi Basic Industries Corp (SABIC).
Riyadh-listed SABIC, the world’s fourth-biggest petrochemicals company, is 70 percent owned by the PIF. It has a market capitalization of SAR 388.17 billion.
The state-owned sovereign wealth fund is investing billions of dollars in investments, including contributing to a fund with US private equity firm Blackstone and SoftBank’s Vision Fund.
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