Saudi Arabia allocates 8% share of Aramco to PIF Fund
Saudi Arabia has recently allocated an 8% share of its leading oil company, Aramco, to the Public Investment Fund’s (PIF) portfolio,
effectively doubling the PIF’s holdings in Aramco through direct and indirect
investments. This strategic move aligns with the kingdom’s objective of
diversifying its economy away from oil dependency. The estimated value of this
stake is approximately $163.6 billion, based on Aramco’s current market value
as reported by LSEG.
In 2022, the PIF directly acquired a 4% stake in Aramco and
another 4% indirectly through Sanabil, a wholly-owned subsidiary of PIF.
Reuters reports suggested that Saudi Arabia might be considering selling
additional Aramco shares to further support the financing of its ambitious
Vision 2030 program. Aramco’s initial public offering, conducted before the
pandemic, raised a historic $29.4 billion.
Saudi
Arabia's Public Investment Fund supporting Vision 2030
While the PIF has not disclosed specific details regarding
the entities to which the shares would be transferred, this initiative is part
of Saudi Arabia’s broader strategy to enhance and diversify its economic
landscape, creating new investment opportunities in line with Saudi Vision
2030, as stated by the state news agency SPA, quoting Crown Prince Mohammed bin
Salman, who oversees the PIF.
This move is expected to bolster PIF’s financial strength
and creditworthiness. Under the guidance of the Crown Prince, the PIF plays a
pivotal role in driving the country’s efforts to diversify its economy,
including the development of major projects and new sectors.
Saudi
Arabia’s PIF and Bahrain Mumtalakat to enhance collaboration and investment
Transforming from a traditional sovereign investor to a
major global investment entity, the PIF holds significant stakes in various
sectors, including technology and sports. Last year, with investments totaling
$31.5 billion, the PIF became the most active sovereign wealth fund globally.
Prior to this latest share transfer, the PIF managed assets worth around $700
billion.
Aramco stated in a filing with the Saudi Exchange that this
transaction is a private transfer, and the company is not directly involved,
entering into any agreements, or receiving any proceeds from it.
The transfer is said to have no impact on Aramco’s issued
share count, with the transferred shares holding the same status as other
ordinary shares. Furthermore, this move will not influence Aramco’s operational
activities, strategic direction, dividend policy, or governance structure.
Source: https://www.leaprate.com/
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