Asset management giant BlackRock (BLK) continues to ramp up efforts to expand its global investment footprint. The company, through its subsidiary Global Infrastructure Partners, is now leading a group of investors to negotiate a $10.3 billion financing deal for state-owned oil producer Saudi Aramco, Reuters reported, citing two sources familiar with the matter.
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The loan is to fund gas processing facilities at Saudi Aramco’s Jafurah field. Financial institutions such as JPMorgan (JPM) and Sumitomo Mitsui (SMFG) are also seeking involvement in the transaction.
The debt package will include both a short-term and a long-term loan arrangement. The deal is targeted at funding a new entity, Jafurah Midstream Gas Company (JMGC), that will acquire the rights to develop and operate Saudi Aramco’s gas processing facilities.
However, the new subsidiary will then lease these rights to Aramco for 20 years. Under the plan, Saudi Aramco will retain the majority stake in JMGC at 51%, while the investor group will take the rest.
BlackRock Hunts for Growth in the Gulf
BlackRock’s latest portfolio-building move follows the company’s plan to deepen its roots in the Middle East region. The New York-based firm is currently working out arrangements to establish an office in Kuwait.
In November, BlackRock obtained a commercial license to operate in Abu Dhabi, the capital city of the United Arab Emirates. It has also sought to operate in ADBM, the city’s financial center.
This is even as the asset manager has established a regional headquarters in Riyadh, Saudi Arabia, as CEO Larry Fink hunts for growth in a region that oversees trillions of dollars in sovereign wealth funds.
Is BlackRock a Good Stock to Buy?
Generally, analysts continue to see huge potential in BlackRock. On TipRanks, BlackRock’s stock has a Strong Buy consensus recommendation based on 12 Buy and one Hold ratings by 13 Wall Street analysts over the past three months.
The average BLK price target is $1,185.85, which indicates a 7.45% potential upswing from current levels.
