Arabian Post Staff -Dubai
In a strategic move to woo international investors, Amin Nasser, CEO of Saudi Aramco, the state-owned oil giant, embarked on a whirlwind transatlantic roadshow. Nasser defied his advisors’ suggestions to prioritize New York and instead began his investor outreach in London. This decision reflects Aramco’s desire to cultivate a broader base of international support, having received a lukewarm reception from foreign investors during their 2019 initial public offering (IPO).
The lackluster foreign participation in the IPO stemmed from lingering concerns regarding corporate governance, environmental practices, and geopolitical instability in the region. Nasser is determined to address these anxieties by personally engaging with investors and highlighting Aramco’s strengths. During his meetings, he accentuated the company’s consistent dividend payouts, even during the economic turbulence of the COVID-19 pandemic. Additionally, Aramco recently introduced a performance-linked dividend scheme, further incentivizing long-term investment.
Nasser’s meticulous approach extended beyond his itinerary. He reportedly spent a significant portion of his transatlantic flight meticulously reviewing presentation materials. This dedication reflects Aramco’s commitment to transparency and its desire to present a compelling case to potential investors.
The impetus for this charm offensive lies in Saudi Arabia’s ambitious Vision 2030 plan, a wide-ranging initiative to diversify the kingdom’s economy and reduce its dependence on oil revenue. The Public Investment Fund (PIF), the sovereign wealth fund, is spearheading this transformation by funneling billions into futuristic projects, spanning from electric vehicle development to the construction of colossal desert cities. To achieve these visionary goals, Saudi Arabia requires substantial foreign investment.
Aramco, the world’s most profitable company, plays a pivotal role in Vision 2030. The funds raised from the share sale will contribute to financing these groundbreaking projects. A successful secondary offering would be a significant endorsement for both Aramco and Saudi Arabia’s economic reform agenda. While the long-term impact of Nasser’s roadshow remains to be seen, his commitment to personally connecting with investors signifies a genuine effort to address past shortcomings and usher in a new era of transparency and international collaboration for Aramco.
Also published on Medium.
