Saudi Arabian Oil Company (Saudi Aramco) Announces the Signing of a Deal to Sell an Equity Stake in One of its Newly-Formed Subsidiaries for a Value of USD 12.4 billion (SAR 46.5 billion)
| Element List | Explanation |
|---|---|
| Introduction | Saudi Aramco announces the signing of a share sale and purchase agreement with an entity controlled by EIG Global Energy Partners on 09/04/2021G corresponding to 27/08/1442H to sell an equity stake in Aramco Oil Pipelines Company (a recently formed wholly-owned subsidiary of Saudi Aramco) for a value of USD 12.4 billion (SAR 46.5 billion). Saudi Aramco will at all times retain title to, and operational control of, the pipeline network. |
| Transaction Details | Saudi Aramco signed a deal to sell 49% of Aramco Oil Pipelines Company to a consortium led by EIG Global Energy Partners for cash consideration of USD 12.4 billion (SAR 46.5 billion). The transaction is expected to close as soon as practicable, subject to customary closing conditions, including any required merger control and related approvals. |
| Transaction Value | USD 12.4 billion (SAR 46.5 billion) |
| Transaction Terms | 1. Immediately prior to completion of the transaction, Saudi Aramco will lease for a 25-year period the usage rights in its stabilized crude oil pipelines network to Aramco Oil Pipelines Company (a recently formed subsidiary of Saudi Aramco).
2. Concurrently, Aramco Oil Pipelines Company will grant Saudi Aramco the exclusive right to use, operate and maintain the pipeline network during the 25-year period in exchange for a quarterly, volume-based tariff payable by Saudi Aramco. The tariff will be backed by minimum volume commitments. Saudi Aramco will at all times retain title to, and operational control of, the pipeline network. This transaction will not impose any restrictions on Saudi Aramco’s actual crude oil production volumes that are subject to production decisions issued by the Kingdom of Saudi Arabia.
3. Upon closing of the transaction, the purchaser will pay Saudi Aramco USD 12.4 billion (SAR 46.5 billion) for a 49% equity interest in Aramco Oil Pipelines Company.
4. Transaction closing is subject to customary closing conditions, including any required merger control and related approvals. |
| Parties of the Transaction | Saudi Arabian Oil Company (Saudi Aramco), and EIG Pearl Holdings S.à r.l (an entity controlled by EIG Global Energy Partners) |
| Transaction Execution Date | 2021-04-09 Corresponding to 1442-08-27 |
| Description of the Business of the Asset forming the Subject Matter of the Transaction | Entering into a “lease and leaseback” transaction with Saudi Aramco in respect of Saudi Aramco’s stabilized crude oil pipeline network for a 25-year period. |
| Asset Book Value | The registered capital of Aramco Oil Pipeline Co. is SAR 100,000 (USD 26,667). The anticipated asset book value of Aramco Oil Pipeline Co. at closing will be USD 25.3 billion (SAR 95 billion). |
| Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction | Not applicable, as Aramco Oil Pipeline Co. is a newly-formed entity and therefore no financial statements are available for the last three years. |
| Transaction reasons | The aim of this deal is to align Saudi Aramco’s existing portfolio of assets with its growth strategy. |
| Expected Impact of the Transaction on the Company and Its Operations | Upon transaction closing, Saudi Aramco will receive USD 12.4 billion (SAR 46.5 billion) in cash, and the purchaser’s stake in Aramco Oil Pipelines Co. will be recorded at the same value as non-controlling equity in Saudi Aramco’s consolidated balance sheet. The transaction is expected to close as soon as practicable, subject to customary closing conditions, including any required merger control and related approvals.
Saudi Aramco will continue to retain full ownership and operational control of its pipeline network. |
| Details of Using The Proceeds of the Asset Sale | The proceeds will be used for general corporate purposes. |
| Related Parties | N/A |
| Additional Information | https://www.aramco.com/en/news-media/news/2021/aramco-signs-infrastructure-investment-deal-with-eig-led-consortium |
Comments