SHAREHOLDER ALERT: Levi & Korsinsky, LLP Notifies Shareholders of Amdocs Limited of a Class Action Lawsuit and a Lead Plaintiff Deadline of June 8, 2021

Bloomberg

Saudis talks about the sale of Aramco’s stake to a global energy company

(Bloomberg) – Saudi Arabia’s Crown Prince said the kingdom was in talks to sell a 1% stake in state oil giant Saudi Aramco to a “leading global energy company” as it predicted an economic recovery from the coronavirus pandemic to Crown Prince Mohammed Bin Salman said in a rare interview on a Saudi television station about the potential sale, which could be worth around $ 19 billion based on the company’s market value, to secure customer demand for the country’s crude late Tuesday. Although he gave few details about which company is involved in the talks, he said the sale could take place in the next two years: “I don’t want to make any commitments to close deals, but there are currently discussions about a 1 % Takeover by one of the world’s leading energy companies, ”said Prince Mohammed, the country’s de facto ruler. “I can’t mention the name, but it’s a huge company. This deal could be very important in boosting Aramco’s sales in the country where the company is based. “China is the largest buyer of Saudi Arabian oil. According to Bloomberg, almost 30% of the kingdom’s crude oil exports went to the Asian country last month. Japan, South Korea and India were the next largest importers. In addition to China, Aramco is committed to making further progress in India, the fastest growing oil consumption market, ahead of the pandemic outbreak. However, the company faces stiff competition from other suppliers and Indian refineries are some of the most price sensitive in the world. The Crown Prince is increasingly relying on Aramco, the world’s largest oil company, to fund its plan to transform and diversify the Saudi economy – an initiative called Vision 2030. These efforts have faced hurdles in recent years. Investors were frightened by the kingdom’s domestic policies and the assassination of Saudi critic Jamal Khashoggi in 2018 and then by the Covid-19 pandemic last year The IPO, which sold around 2% of shares on the Riyadh Stock Exchange, raised nearly $ 30 billion. The money was transferred to the kingdom’s sovereign wealth fund and was intended to support investments to turn the largest Arab economy from reliance on oil sales. Since then, Aramco has also taken on debt and started selling some non-core assets to maintain a dividend of $ 75 billion, most of which goes to the state. Although Aramco’s IPO was the largest stock sale in history, most of the money had come from local investors and wealthy Saudi families. Most foreign investors resisted the rating and stayed away. The sale brought in only a fraction of the originally planned US $ 100 billion. Prince Mohammed said the government, which still controls more than 98% of Aramco’s shares, can sell more shares on the Saudi stock exchange without specifying a time frame. The state-owned company said in a statement that any decision to sell more shares is “a matter for the majority shareholder, who has stated that it will examine the possibility and timing according to market conditions.” The Kingdom is increasingly looking for ways to get cash out of Aramco’s fortune. The company announced this month that a US-led consortium will be investing $ 12.4 billion in its oil pipelines. Bloomberg reported this week that a deal for gas pipelines is also being considered. Aramco has separately launched a strategic review of its upstream oil and gas facilities that could result in the company opening them up to overseas investors. Saudi Arabia will likely have to continue to grow crude oil production to offset demand, which the Crown Prince said is expected to continue to grow over the next two decades. While consumers like China and India consume more, manufacturing by manufacturers like the US and Russia is projected to decline over the next 10 to 20 years, allowing Saudi Arabia to fill a supply gap, Prince Mohammed said. While this is more pessimistic projections that predict demand will fall by around 2030 will come true, supply will fall even faster and give Saudi Arabia an opportunity to sell more crude, he said. Prince Mohammed did not say how much the country wanted to increase production by. The government said last year it had directed Aramco to increase its maximum production capacity from its current 12 million barrels to 13 million barrels a day. This plan is making “very good progress,” said chairman Amin Naser in March, without giving any further details on the timing. Saudi Arabia regularly pumps around 10 million barrels a day and has slowed production this year due to cuts by the OPEC + group. Last year, the UK’s economy contracted the most in more than three decades, according to estimates by the International Monetary Fund. But the outlook has improved since then. A budget deficit of 4% of gross domestic product is forecast for 2021, which is smaller than the gap of 12% in the previous year. On the fifth anniversary of the introduction of Vision 2030, Prince Mohammed said the country’s unemployment rate would fall as the economy wore a “V-shaped” recovery: “Unemployment will fall to less than 11% this year, then to around 10%, then to 7% in 2030, ”he said in an interview with the television station Rotana Khalejia. Unemployment among Saudi Arabia The number of nationals fell to 12.6% late last year after peaking at 14.9% in September. Prince Mohammed also touched on delicate relations with the United States, in which President Joe Biden’s administration has said it wants to recalibrate a relationship that is a core part of former President Donald Trump’s Middle East strategy. “Neighboring country” “There will never be 100% agreement between two countries,” said Prince Mohammed. “The margin of difference between different administrations in the White House could widen or narrow, but we agree with the Biden administration,” he added about 90% of the time. The Crown Prince asked about the kingdom’s regional rival, Iran, and softened his tone compared to previous statements that said Saudi Arabia was working to resolve its differences with the Islamic Republic: “In the end, Iran is a neighboring country” he said, adding that the kingdom wanted Iran to thrive, but its nuclear program and support challenged regional militias: “We are working with our partners in the region today to find solutions to these problems and we hope to overcome them and have a good and positive relationship with them, ”he said. In the 90-minute interview, Prince Mohammed also said: Part of the government’s shares in Aramco could be transferred to the sovereign wealth fund known as the PIF. The PIF will not transfer its revenue to the state treasury until 2030. The decision to increase value added x to 15% last year “will be temporary from a maximum of one to five years, with a sales tax target of 5% to 10%” The Kingdom has no plans to introduce an income tax (updates with Aramco comment in the ninth paragraph.) More Articles Visit us this way at bloomberg.com. Sign up now for the most trusted source of business news. © 2021 Bloomberg LP