Saudi Aramco is planning to restructure its deal to acquire a 70% stake in Saudi petrochemicals giant SABIC after seeing its value drop by more than 40% as oil prices have spiralled due to the coronavirus pandemic, Reuters reported.
The deal, announced in March 2019, was set at $69.1 billion, 123.39 riyals ($32.86) per share, but it is now trading at around 70 riyals per share. With SABIC's market value now at $56.5 billion, Aramco's 70% stake would be worth around $40 billion.
Reuters reported that Yasir al-Rumayyan, chairman of Aramco and the head of the Public Investment Fund (PIF) is heading the talks and that the price will be reviewed, according to anonymous sources. Another source added that Aramco was looking to reduce the burden on its balance sheet.
The PIF could extend a $10 billion bridge loan signed with 10 banks in October, several sources told Reuters, linked to Aramco's SABIC deal. The loan was meant as short-term funding for the PIF to make new investments, which would have been repaid after the SABIC deal completed.