June 22, 2024
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ELECTRICITY

Saudis to Raise $11.2 Billion from Aramco Share Sale

The Kingdom of Saudi Arabia is set to raise at least $11.2 billion from the ongoing secondary offering of shares in Saudi oil giant Aramco, Bloomberg reported on Friday, citing anonymous sources familiar with the matter.

Energy Afrique has earlier reported that Saudi Arabia and its bankers would start taking orders last week for up to $13.1 billion worth of shares in its energy giant Aramco, marking a significant test of international investor interest in the Saudi market.

The kingdom and Aramco detailed plans to sell up to 0.7% of the state-controlled oil company, with 10% of the offering reserved for retail investors which would run through June 6, with the deal set to price on June 7.

The Saudi government plans to sell 1.545 billion shares of Aramco, representing about 0.64% of the company’s issued shares, at a price of $7.27 (27.25 Saudi riyals) per share. Aramco has set a price range of 26.70 to 29 riyals per share for the offering.

Thursday marked the deadline for potential investors to submit bids for the secondary offering.

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This stock offering, the largest global deal of its kind in three years, is expected to generate over $11 billion for the Kingdom. Crown Prince Mohammed bin Salman aims to use these funds to transform Saudi Arabia into a modern, diversified economy focusing on digital technology and tourism, reducing its dependency on oil.

OilPrice.com reports that the Saudi government currently owns approximately 82% of Aramco, while the Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, holds around 16%.

Saudi Aramco debuted on the Saudi Stock Exchange in December 2019, raising around $30 billion in a record-breaking share listing. Since the IPO, Saudi leaders, including Crown Prince Mohammed bin Salman, have indicated there would be more Aramco share sales in the future.

The secondary offering, launched on June 2, sold out within hours, according to sources who spoke to Bloomberg last weekend.

The share sale has attracted significant demand from foreign investors, sources told Bloomberg on Thursday. Market analysts will closely monitor this demand to determine if the Saudi oil giant has successfully garnered international interest this time, in contrast to the lukewarm foreign investor response during the 2019 IPO.

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