BackSaudi wealth fund weighs options for $86 billion Aramco stake
The Public Investment Fund is evaluating options for its 4% holding in Saudi Aramco, according to sources.
PremiumSaudi Arabia’s sovereign wealth fund has kicked off discussions about how to monetize its roughly $86 billion stake in the world’s largest energy company as it seeks to raise funds for ambitious investment goals, people familiar with the matter said.
The Public Investment Fund is evaluating options for its 4% holding in Saudi Aramco, the people said, asking not to be identified as the matter is private. Potential advisers are pitching a range of possibilities, including a full or partial sale of the stake, or raising money by pledging the stock against the issue of convertible debt instruments or loans, the people said.
Talks are at an early stage, and it hasn’t made any decisions on which path to pursue, the people said. A representative for PIF declined to comment.
The Saudi government transferred the 4% stake to PIF earlier this month. That was shortly after Bloomberg News reported that officials were discussing a fresh stock offering of the company, which raised almost $30 billion in a 2019 initial public offering. The government still holds 94% of Aramco, while the free float is around 2%.
$1 Trillion Ambition
Once a sleepy holding company for government investments, PIF now has more than $500 billion in assets and is snapping up everything from soccer clubs to electric carmakers.
Chaired by Crown Prince Mohammed bin Salman, the PIF wants to grow its assets to about $1.1 trillion by 2025 and invest $40 billion annually in the Saudi economy along the way.
While its biggest holdings are still in local businesses, such as Saudi National Bank and Saudi Telecom Co., the Crown Prince wants the fund to do more to stimulate inward investment, develop new industries, bring access to new technologies and create jobs.
Borrowing has always been part of the plan for PIF as it looks to realize these ambitions. It’s already tapped global banks for multi-billion-dollar loans and next up is a green bond as it looks to finance environmental projects like Neom, a $500-billion city run entirely on renewable power.
Aramco’s fortunes, meanwhile, have shifted dramatically since its record-breaking 2019 initial public offering. After enduring a painful oil-price slump in the initial stages of the Covid-19 pandemic, producers are now enjoying surging profits as fears of supply scarcity drives crude higher.
Shares in Aramco have risen 17% in the last year, giving it a market value of $2.2 trillion and putting it behind only Apple Inc. and Microsoft Corp. Saudi Arabia has responded by starting preliminary discussions on a fresh Aramco stock offering that could raise more money than its landmark listing.
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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
