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Saudi Arabia transfers Aramco shares valued at more than 70,000 million to its sovereign wealth fund

2022-02-13T20:24:20.572Z


Analysts believe that the transaction may be the prelude to a new sale of securities on the Stock Exchange. The oil company is the third most valued company in the world


Two men look at a Saudi Aramco listing panel at the Riyadh Stock Exchange. Amr Nabil (AP)

The dance continues in the capital of Aramco, the largest oil company on the planet and one of the first companies by market value.

After going public two years ago, the Saudi state announced this Sunday that it will transfer 80,000 million dollars (70,500 million euros) in shares of the energy company to its sovereign fund, a movement with which it aspires to strengthen its financial position and your credit rating.

The measure, which affects around 4% of the capital, comes amid a wave of rumors about a possible IPO of a new shareholding package taking advantage of high crude oil prices.

"The transfer of shares is part of the long-term strategy of the kingdom, aimed at maintaining the restructuring of the national economy," the Saudi authorities stressed.

Despite the transaction, which does not entail any payment or consideration, the Saudi state remains the largest shareholder in Aramco, with 94% of its shares.

The sovereign wealth fund is one of the cornerstones in the project to diversify the country's economy, which today depends almost entirely on oil revenues.

In 2019, when the company began trading, only 2% of the capital was listed, valued at almost 30,000 million dollars.

Now, all eyes are on the possibility of a new sale of shares in the hands of the Kingdom of the Desert.

Thamer Al Saeed, of the local investment firm Mad'a Investment, believes that the operation announced this Sunday could be the appetizer of what is to come.

“It is an indicator that we could expect a second public offering of Aramco shares,” he says in statements to Bloomberg.

With oil hovering around $95 a barrel, its highest level in about eight years, Aramco—one of the world's three most valued companies, behind only Apple and Microsoft—is valued at nearly $2 trillion. dollars, the equivalent of Italy's GDP.

And Riyadh's will seems clear: take advantage of the good moment the sector is going through to sell shares and dedicate resources to others with a more future, such as renewables or the electrification of transport.

The Public Investment Fund, the name given to the investment vehicle to which 4% of Aramco's capital has been transferred, has to its credit investments as varied as shares of Uber or, more recently, the British soccer team Newcastle United, for which he paid 350 million euros.

The goal of its managers is to reach 2025 with a trillion dollars in assets, more than double what it is today.

If achieved, it would become the third largest on the planet, only behind the Norwegian and the Chinese.

Inside doors, his commitment also involves investing some 40,000 million dollars in the development of the Saudi economy.

Source: elparis

All business articles on 2022-02-13

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