MEOG: PIF receives more Aramco shares

Saudi Arabia’s Crown Prince Mohammed bin Salman (MbS) has announced the transfer of a 4% stake of Saudi Aramco to a subsidiary of the kingdom’s sovereign wealth fund, the Public Investment Fund (PIF).

Sanabil Investments, the subsidiary in question, will receive the stake, further bolstering the kingdom’s financial position as it seeks to diversify its economy beyond oil.

According to a statement released by the state-run Saudi Press Agency, the move will “solidify PIF’s strong financial position and credit rating,” but no specific investment targets for either Sanabil or PIF were mentioned.

Saudi Aramco acknowledged the shares going to Sanabil but clarified that the Saudi government remains the company’s largest shareholder with 90.3% of its stock. Aramco emphasised that it was not involved in the transaction and did not enter any agreements or pay or receive any proceeds from it.

The transfer is part of the government’s efforts to boost the sovereign wealth fund and invest in non-oil industries to reduce the country’s dependence on oil.

The share transfer follows a similar move in February 2022, when 4% of Saudi Aramco’s shares were transferred to the PIF. The remaining 1.7% was sold during the company’s 2019 initial public offering (IPO) on the local stock exchange, Tadawul All Share Index (TASI).