Saudi Crown Prince Sees More Aramco Share Sales to Boost PIF
The sun sets beyond crude oil storage tanks at the Juaymah tank farm at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Ras Tanura, Saudi Arabia. (Photographer: Simon Dawson/Bloomberg)

Saudi Crown Prince Sees More Aramco Share Sales to Boost PIF

Saudi Aramco will sell more shares as part of the kingdom’s plan to boost the size of its sovereign wealth fund to $1.1 trillion by 2025, according to Saudi Crown Prince Mohammed bin Salman.

“There are going to be more share sales by Aramco in the following years,” Prince Mohammed said during a video aired Thursday at the Future Investment Initiative in Riyadh. “This cash will be transferred to the Public Investment Fund and be re-injected inside and outside the kingdom of Saudi Arabia for the benefit of the fund.”

The kingdom’s de facto ruler didn’t specify if the world’s biggest oil company would list more shares locally, sell them on a foreign exchange, or both.

Aramco listed its stock for the first time on Riyadh’s Tadawul exchange in late 2019 in the world’s largest initial public offering. The Saudi government still owns around 98% of the company, which has a market value of $1.9 trillion, second only to Apple Inc.

The prince spoke in Arabic in an interview with former Italian Prime Minister Matteo Renzi. The FII is the kingdom’s annual investment event and featured top global executives like Blackstone Group Inc.’s Steve Schwarzman and SoftBankCorp.’s Masayoshi Son this year. Most spoke via video link, though some such as Total SE Chief Executive Officer Patrick Pouyanne attended in person.

Building Up PIF

Prince Mohammed spoke about Aramco while addressing how the sovereign fund plans to increase its assets from around $400 billion. One source of growth, he said, will be assets currently valued at zero on the PIF’s books, including land on which the government plans to build the futuristic city of Neom and the Red Sea Project, a tourism development.

“Once investments are injected, this will be reflected on the value of the assets themselves,” the 35-year-old heir to the throne said.

Cash generated from further privatizations will also be transferred to the PIF, he said.

“I do not think it is a hard challenge,” the prince said of the $1.1 trillion target. “Without doubt, the target will be achieved.”

Also on Thursday, the sovereign fund announced that it had formed a Jeddah-based company, called “Cruise Saudi,” to develop a local cruise industry as Prince Mohammed tries to turn Saudi Arabia into a global tourism destination. The fund is increasingly focusing on the domestic economy, with plans to invest 150 billion riyals or more per year at home.

©2021 Bloomberg L.P.

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