Saudi Arabia transfers 4% of Aramco shares to sovereign wealth fund – Times of India


DUBAI: Crown Prince of Saudi Arabia Muhammad bin Salman has ceded 4% of saudi aramco to the Public Investment Fund (FIP), Saudi Arabia’s sovereign wealth fund, the government said on Sunday.
The shares worth nearly $80 billion will bolster PIF’s strong financial position and high credit ratings in the medium term, the crown prince said in a statement. The fund is the prince’s chosen vehicle to transform the Saudi economy and diversify beyond oil revenues.
The state remains the largest shareholder in Saudi Arabia aramco after the transfer process, as it retains more than 94% of the company’s shares, the statement read.
The transfer of existing shares would help boost PIF’s assets under management, which is targeted to grow to around 4 trillion riyals ($1.07 trillion) by the end of 2025, it added.
“It supports the prospect for the PIF to raise funds internationally, including bonds, and could potentially support a future sale of Aramco shares in the future,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Saudi Aramco said in a statement that the transfer was a private transaction between the government and the state fund. “The company is not a party to the transfer and did not enter into any agreement or pay or receive any proceeds from that transfer,” he said.
He said the move would not affect the number of shares issued or the company’s operations, strategy, dividend distribution policy or governance framework.
It added that the transferred shares would have the same rank among other existing ordinary shares.
Saudi officials had previously raised the possibility of the sale of Aramco shares. The PIF did not comment.
The head of the sovereign wealth fund, Yasir al-Rumayyan, said last year that Saudi Aramco could consider selling more shares if market conditions are right, while the Wall Street Journal recently reported that the kingdom could target a sale. stake of up to $50 billion.
Aramco, the world’s largest oil company, completed the world’s largest initial public offering in late 2019, raising $29.4 billion, with the proceeds transferred to the PIF.
Aramco shares are up just over 4% so far this year, valuing the company at $1.99 trillion, trailing the world’s most valuable company Apple Inc and Microsoft Corp.
After a sharp drop in energy prices in the early days of the pandemic, oil demand is approaching pre-Covid levels with Brent crude trading around $94 a barrel amid shortage concerns. of world supplies.


Source link


Please enter your comment!
Please enter your name here