Saudi Arabia Sets Up New Aramco Share Sale That Could raise $13.1bn
Editor
31 May 2024 08:34 WIB
TEMPO.CO, Jakarta Dubai - Saudi Arabia's government on Thursday, May 30, filed papers to sell a new stake in state oil giant Aramco (2222.SE) which could raise as much as $13.1 billion, a landmark deal to help fund Crown Prince Mohammed bin Salman's plan to diversify the economy.
In the main part of the deal, Saudi Arabia could raise $12 billion by offering about 1.545 billion Aramco shares, equivalent to about 0.64% of the company, if it prices the sale at the top end of a 26.7 ($7.12) to 29 riyals range, according to Aramco's filing on Riyadh's Saudi Exchange.
The deal's value could rise to $13.1 billion at the top end under a so-called greenshoe option which would allow the sale of nearly 1.7 billion shares, or a 0.7% stake. That option allows bankers to use shares to stabilize the price of the offering.
Investors have long anticipated the share sale as the energy giant has sought to widen its base while generating funds to turbocharge Saudi Arabia's economic diversification program.
"The offering provides us with an opportunity to broaden the shareholder base amongst both Saudi and international investors," Aramco Chief Executive Amin Nasser told reporters on a call after the announcement.
"It also offers us an opportunity to increase liquidity and to increase our global index weighting."
The offering is the culmination of a years-long effort to sell another chunk of one of the world's most valuable companies following its record-setting IPO in 2019 raised $29.4 billion. About 10% of the latest offering will be reserved for retail investors, subject to demand.
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Sources told Reuters last week the offering could happen as soon as June.
Since the IPO, Aramco has remained a cash cow for the Saudi government, financing a mammoth economic drive to end the kingdom's "oil addiction", as the crown prince once called it.
