Saudi Aramco To Sell 1% Stake To Foreign Company

Prince Mohammad Bin Salman of Saudi Arabia has disclosed that the country was holding talks to sell 1 percent of state oil firm Saudi Aramco to a global energy company. 

The Crown Prince said that Aramco, which is the biggest oil company in the entire world could sell even more shares to international investors in the coming years.

In the televised statement, he said, "There are talks now for the acquisition of a 1% stake by a leading global energy company in an important deal that would boost Aramco's sales in ... a major country. There are talks with other companies for different stakes, and part of Aramco's shares could be transferred to the (Saudi) Public Investment Fund and a part listed ... on the Saudi bourse."  

He however didn't disclose the name of the companies they're in talks with.

The Aramco initial public offering in 2019 was a major part of the economic diversification plan, which was aimed at attracting foreign investors.

When it went public in December 2019 and listed 1.5 percent of its shares on the stock exchange, Saudi Aramco became the company with the world's biggest IPO.

The initial public listing raised $25.6 billion, and the company later used its “greenshoe option” to sell 450 million more shares, bringing the total size to $29.4 billion.

The money gotten from the listing was transferred to the PIF, Prince Mohammed’s vehicle of choice to transform the Saudi economy.

Aramco, which was also the world’s biggest oil company by market value, paid a huge sum of $75 billion to its shareholders for 2020 even as the coronavirus pandemic affected its earnings.

In 2016, the Crown Prince, Mohammed Bin Salman, disclosed a plan to raise huge sums, as huge as $100 billion through an international and domestic listing of a 5 percent stake in the company.

The next year, PetroChina and Sinopec, both Chinese companies, wrote to Aramco to indicate interest in direct deals.

Last year, Saudi Arabia announced its economy shrink by the most percent in the past 30 years. The budget shortfall is estimated to be 4 percent of the GDP by December, which is even smaller than last year's 12 percent difference.

The Crown Prince is depending on Aramco to help finance the transformation of the economy.