Saudi Aramco on Monday began its first dollar-denominated Islamic bond sale, state media said, as the energy giant seeks to raise cash to fund its hefty dividend payments.

The sale of sukuk, or Islamic bonds compliant with the Muslim faith, will end on June 17, the official Saudi Press Agency said, without specifying how much cash Aramco is seeking to raise.

The sale comes after two previous bond offerings that were not compliant with Islamic law – a debut $12 billion sale in 2019 and an $8 billion offering in November last year.

The company is raising money to help pay an annual dividend of $75 billion, a key revenue source for the Saudi government, Aramco’s biggest shareholder.

The company is raising money to help pay an annual dividend of $75 billion

Aramco, the kingdom’s cash cow, pledged to pay the dividend when it sought to generate interest in its debut initial public offering on the Saudi bourse in December 2019. But company finances came under pressure last year, when crude prices tanked as the coronavirus pandemic sapped global demand.

Last month, Aramco declared a 30 per cent jump in first quarter profit, thanks to a recovery in oil prices, but the company’s free cash flow fell short of the $18.75 billion dividend obligation for that period.

Aramco is pushing to raise cash as Riyadh faces a ballooning budget deficit and pursues multi-billion dollar projects to diversify its oil-reliant economy.

In April, Aramco said it had struck a $12.4-billion deal to sell a minority stake in a newly formed oil pipeline business to a consortium led by US-based EIG Global Energy Partners.