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Saudi Aramco Looks to Supply-Chain Finance to Free Up Cash – The Wall Street Journal

Saudi Aramco wants to finance billions of dollars in payments to its suppliers, the latest in a series of moves by the crude giant to generate cash in a low-oil price world, according to people familiar with the proposal.

Saudi Arabian Oil Co. , as it is officially known, sent out a request to banks and financial technology companies in recent weeks to set up a type of corporate cash advance program known as supply-chain finance, according to the requests and the people. Aramco is the third-most profitable company in the world after Apple Inc. and Microsoft Corp.

A spokesperson for Aramco confirmed it is exploring a supply-chain finance initiative, saying it wants to improve the experience of its vendors. The process is at an early stage and the company hasn’t selected banks, the spokesperson said.

Aramco estimates it would pay between $500 million and $2 billion in supplier invoices a month, according to documents Aramco sent to banks and reviewed by The Wall Street Journal. It couldn’t be learned who is bidding for the business. Large players in the space include Citigroup Inc. and JPMorgan Chase & Co.