The crown prince of Saudi Arabia, Mohamed bin Salmán, has announced the transfer of 4% of the shares of Saudi Aramco into the hands of the sovereign wealth fund PIF Investment, according to the Saudi Press Agency. The operation, valued at nearly 80,000 million euros, will serve to strengthen the investment capacity of the fund, which already has holdings in companies such as ArcelorMittal, Uber and Softbank, and represents one of the largest operations in the history of sovereign wealth funds.
The transfer of these actions, which represent an amount similar to the Spanish Recovery and Resilience Plan, is part of the Kingdom’s long-term strategy to support the restructuring of the national economy, in line with its 2030 Vision, and also contributes to supporting the fund plans to increase the volume of its assets under management.
Saudi Aramco’s shares will contribute to improving the fund’s financial position and its credit rating in the medium term, as well as to climb positions within the ranking by managed assets in which China and the United Arab Emirates still have an advantage.
In any case, Saudi Arabia will remain Saudi Aramco’s largest shareholder after the transfer process, since it owns more than 94% of the company’s total shares after Aramco already sold 1.5% of its capital on the stock market. in December 2019 for close to 26,000 million euros.
Bin Salmán concluded his statement, indicates the Saudi Press Agency, with the intention of continuing to implement his initiatives to complete the process of economic and financial reforms that he has undertaken, the economic transformation plans and provide more investment opportunities for development funds and the private sector, therefore contributing to the achievement of the goals of the Vision of the Kingdom 2030.
Within this plan, the PIF fund has several assignments. First, Saudi Arabia intends to transform the kingdom into a logistics center through “an integrated plan for the infrastructures necessary for the transport and logistics sector to expand economic activity throughout the Kingdom.” The country intends to expand the capacity of its current facilities in order to eliminate bottlenecks and “speed up” freight and passenger traffic. It also aims to streamline customs and border procedures to reduce import and export times and expenses.
Second, it seeks to improve mobility and quality of life within the country itself through investments in transport safety, public transport systems and energy efficiency standards that lead to greater environmental sustainability.
Third, the country seeks to improve financial sustainability by paying more attention to financial performance and its infrastructure assets. It will also try to increase the participation of the private sector.
Finally, it will apply a “new governance model” for its public transport and logistics companies and their assets.
Agreement with Grifols
The Saudi Arabian sovereign wealth fund signed an agreement with Grifols (products derived from blood plasma) for the joint development of plasma centers and production facilities in Saudi Arabia. The project was expected to be articulated through a new company (joint venture) jointly owned by Grifols and PIF.
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