Saudi energy giant Aramco made $111 billion in net profit last year, making it the most profitable company in the world (MARWAN NAAMANI)

Paris (AFP) – Energy giant Saudi Aramco on Tuesday raised the size of a bond issue aimed at helping to diversify the Saudi economy to $12 billion from an initial $10 billion target following heavy demand, a source close to the operation told AFP.

Demand for the issue comprising several bond maturities totalled $92 billion, the source said, making it nearly 6.7 times oversubscribed.

Saudi Arabia’s Energy Minister Khalid al-Falih said previously that the firm aimed to raise $10 billion towards Aramco’s purchase of a controlling stake in chemicals behemoth SABIC.

The issue covers maturities from three to 30 years.

Falih is also chairman of state-owned Aramco, the world’s largest energy company.

The firm announced last month it was buying a 70-percent stake in SABIC from Saudi Arabia’s main sovereign wealth fund, the Public Investment Fund (PIF), for $69.1 billion.

Aramco made $111 billion in net profit last year, making it the most profitable company in the world. It said it will pay for most of the SABIC purchase in cash.

Observers see the acquisition as way to boost the coffers of the PIF, which is leading efforts to transform the petro-state to a tech-focused economy.

Ahead of the bond issue, Aramco revealed its accounts to international ratings agencies for the first time ever.

The firm aims to “establish a permanent presence in the world capital markets,” Falih said in a clear reference that it will continue to seek debt.

Meanwhile, Aramco has not scrapped plans to sell up to five percent of its shares, which would likely raise tens of billions of dollars.

Fitch ratings agency said last week that based on information received from Aramco, its planned initial public offering (IPO) still stands and is likely to take place in 2021.

The SABIC operation provides a way to pump cash into the PIF while work on the IPO continues.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.