Saudi Aramco has mandated banks for its landmark debut bond issuance, as the state oil giant pushes forward with plans to raise funds ahead of its proposed acquisition of the country’s petrochemical group.

The oil company, which has had its plans for an initial public offering delayed, has appointed JPMorgan, Morgan Stanley, Citi and HSBC to manage the debt sale.

The appointments, first reported by Reuters, illustrate continued progress towards a landmark transaction for one of the world’s most valuable companies. The issuance is viewed as a particularly significant step for the state-owned entity as it will have to disclose financial details in the bond prospectus.

“It’s one of the defining events of the year, the fact there will be disclosure and a full prospectus,” said a bank executive. “Probably the most important thing is the company wants to establish itself as kind of best of global task, size (of the bond) is secondary.”

The funds are expected to be used to pay for Saudi Aramco’s acquisition of Saudi Arabian Basic Industries Corp, or Sabic, which is 70 per cent owned by the kingdom’s leading sovereign wealth fund, the Public Investment Fund.

That deal was announced after the much-anticipated partial privatisation of Aramco was shelved. The transaction is expected to transfer around $70bn to the PIF, though the final sale price has not been announced.

Bankers said the level of disclosure with the bond issuance would be similiar to an initial public offering.

Saudi Arabia’s energy minister Khalid Al Falih told the Financial Times earlier this week that the deal had “progressed quite far.”

The PIF, Crown Prince Mohammed bin Salman’s investment vehicle, is seeking cash to make more overseas acquisitions and fund domestic diversification plans.

Mr Falih in January said Saudi Aramco was planning to approach the market for a debt sale in the second quarter of this year. Plans for a bond issuance were not linked to the Sabic acquisition, he added, but sought to diversify the oil group’s funding streams.

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