Saudi Government Allocated Significant Shares of 4% to Sanabil Investments; continues to be the Largest Shareholder in Aramco

Saudi Arabia has transferred a 4% share in Saudi Aramco to the Saudi Arabian Investment Company, a wholly-owned subsidiary of the sovereign wealth fund, the Public Investment Fund, Crown Prince Mohammed bin Salman announced.

Following the transfer to Sanabil Investments, as the PIF unit is known, the state remains Aramco's largest shareholder, with a 90.186 percent ownership in the firm, Aramco said in a statement to the Saudi stock exchange Tadawul, where its shares are traded.

In February, the state transferred 4% of Aramco's shares to the PIF as part of the kingdom's "long-term strategy” to support the restructuring of its economy in accordance with Vision 2030.

According to the bourse statement, the newest transfer will have no effect on Aramco's total number of issued shares, and the shares transferred will rank equally with other existing ordinary shares.

Based on Saudi Aramco's current market value, the 4% stake would be valued around USD 77 billion.

This is a private transfer between the state and Sanabil, and the company [Aramco] is not a party to it and has not entered into any agreements or paid or received any proceeds from it.

The company further affirmed that the move "does not have an impact" on its operations, strategy, dividend distribution policy, or governance system.
Any material development will be announced in accordance with the applicable rules and regulations.

Saudi Aramco, the world's largest oil supplier, completed the world's largest IPO in 2019, raising USD 25.6 billion, and then sold additional shares, bringing the total to USD 29.4 billion.

Its annual net profit increased 46 percent to a record USD 161.1 billion in 2022, thanks to higher oil prices, the company reported in a regulatory filing last month

Fitch Ratings upgraded Aramco's long-term foreign and local currency issuer default ratings to A+ from A, with a stable outlook, earlier this month, citing the company's strong business profile and goals to offer a "sustainable and progressive dividend."

Last year, Yasir al-Rumayyan, governor of PIF and chairman of Aramco, stated that if market conditions are favourable, the corporation may explore selling more shares.

According to the Saudi Press Agency, the transfer of a portion of the state's stake in Aramco represents a continuation of Saudi Arabia's long-term initiatives to diversify the national economy and boost investment options in line with Vision 2030.

The move will also help to strengthen PIF's financial situation and credit rating. The move comes as the fund's mandate to establish new sectors, form new strategic collaborations, localise technology and knowledge, and create more direct and indirect job possibilities in the local market continues.

With around USD 620 billion in assets, the PIF is one of the world's largest sovereign wealth funds. It is essential to the Saudi Vision 2030 drive to diversify the country's economy away from hydrocarbons.

The PIF plans to more than double the size of its assets under administration to USD 1.07 trillion over the next five years, according to a five-year strategy unveiled in 2021, and to devote USD 40 billion annually to the development of Saudi Arabia's economy until 2025. It will provide USD 320 billion to the non-oil economy of the kingdom.

Over the last four years, the fund has launched more than 30 new firms, created 331,000 jobs in Saudi Arabia, and tripled assets under control.

Health care, renewable energy, telecommunications, media and technology, food, and agriculture, automotive, transportation and logistics, real estate, aerospace and defence, construction and building components, and services are among them. The kingdom will also continue to invest in entertainment, leisure, and sports, as well as financial services, metals and mining, and retail.

The fund established companies such as Neom, the Red Sea Development Company, Qiddiya, the KAFD Development and Management company, SAMI, the Saudi Jordanian Investment Fund, Jeddah New Downtown Company, Saudi Entertainment Venture, Saudi Information Technology Company, and National Energy Services.

As per Procurement Resource, Saudi Arabia recently sold a 4% stake in Saudi Aramco to the Saudi Arabian Investment Company, a wholly-owned subsidiary of the national wealth fund, the Public Investment Fund, according to Crown Prince Mohammed bin Salman.

Following the transfer to Sanabil Investments, as the PIF unit is known, the state remains Aramco's largest shareholder, with a 90.186 percent stake in the company, Aramco said in a statement to the Saudi stock exchange Tadawul, where its shares are traded.

The state transferred 4% of Aramco's shares to the PIF in February as part of the kingdom's long-term strategy to support the restructuring of its economy in accordance with Vision 2030.