PIF doubles stake in Saudi Aramco to 16%

Sputnik/Sergei Savostyanov/Pool via Reuters

Saudi Arabia has completed the transfer of an 8 percent stake in Aramco to the sovereign Public Investment Fund ahead of a planned flotation of the oil major.

“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 Vision 2030,” state-owned Saudi Press Agency (SPA) reported, citing Crown Prince and Prime Minister Mohammed bin Salman.

The move brings the total stake held by PIF and its subsidiaries to 16 percent. The share transfer will further solidify PIF’s strong financial position and credit rating, the Crown Prince said.

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Following the transfer, the government’s total ownership of Aramco will be 82 percent.

The stake is worth $163.6 billion, Reuters reported, citing Aramco’s market capitalisation. The company’s shares, which trade on the Saudi stock exchange, closed at SAR31.75 ($8.47) on March 7, giving it a market capitalisation of just over $2 trillion.

The sovereign wealth fund has owned four percent of Aramco since 2022. It indirectly holds another four percent, which was transferred to its subsidiary, Sanabil Investments, in April 2023.

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Last month, media reports suggested that the government had hired banks, including Citigroup, Goldman Sachs Group and HSBC Holdings, for a potential share sale in Aramco that could raise nearly $20 billion – up from earlier estimates of $10 billion.

Earlier this year, PIF raised $7 billion from two debt sales, while Global SWF reported its estimated total debt to be around $36 billion. 

In a filing to the Saudi bourse, Aramco said that the company was not a party to the private transfer and did not enter into any agreements or pay or receive any proceeds from the transfer.

“The transfer will not affect the company’s total number of issued shares, and the shares transferred will rank equally alongside other existing ordinary shares in the company,” it said.

The stake transfer will have no impact on its operations, strategy, dividend policy or governance framework, the oil major clarified.