RIYADH: Saudi Arabia transferred an 8% stake in Aramco to the country’s Public Investment Fund, as the kingdom reorganises its holdings to boost the sovereign wealth fund ahead of a potential public offering in the oil giant.
The stake is worth roughly $163.6 billion, according to Aramco’s market capitalisation, LSEG data shows.
Saudi Arabia is poised to sell more shares in Aramco later this year, sources told Reuters last month, which could boost financing for the kingdom’s ambitious economic reform agenda known as Vision 2030.
PIF declined to comment on which entities the additional shares would be transferred to.
The fund has held a 4% stake in Aramco since 2022 and indirectly holds another 4% that was transferred last year to Sanabil, which it wholly owns.
The transfer “is a continuation of Saudi Arabia’s long-term initiatives to boost and diversify the national economy and expand investment opportunities in line with Saudi Vision 2030,” state news agency SPA said on Thursday, citing Crown Prince Mohammed bin Salman, who is known as MBS and chairs PIF.
“The transfer will also solidify PIF’s strong financial position and credit rating,” SPA added.
PIF has raised $7 billion from two separate debt sales this year, taking advantage of strong investor demand for emerging-market issuers.
Its total debt is estimated at around $36 billion, Global SWF said in a report dated Feb. 29, adding that the sovereign fund was unlikely to halt its borrowing spree.
“The transfer will provide (the PIF) with over $9 billion in annual dividend revenue from Aramco,” said Justin Alexander, director of Khalij Economics and GCC analyst for GlobalSource Partners.
PIF Governor Yasir al-Rumayyan, who also chairs Aramco, said last month the fund planned to increase its deployment of capital to $70 billion a year after 2025, from $40 billion to $50 billion currently.
Aramco’s shares closed at 31.75 riyals ($8.47) on Thursday, slightly below their 2019 IPO price of 32 riyals, giving it a market capitalisation of nearly $2.05 trillion.
PIF is central to the crown prince’s plan to diversify the economy by building new industries and what PIF refers to as giga-projects.