Oil giant Saudi Aramco on Sunday kicked off the second day of a potentially $12 billion share offering aimed at bolstering state finances amid complex and controversial economic reforms.
Saudi Aramco’s offer in massive share sale
The company announced plans to sell 1.545 billion shares on the Saudi stock exchange, setting a price range between 26.70 and 29 Saudi riyals (approximately $7 to $7.70). Sunday marked the start of the period for attracting both domestic and international investors, Aramco said in a statement, which will allow the company to assess market demand.
As of Sunday morning, order books opened with a price range between 26.70 ($7.12) and 29 Saudi riyals per share. On Thursday, Aramco had announced its plan to sell 1.545 billion shares, representing approximately 0.64% of the company.
At the average price in this range, the sale would raise about $11.5 billion, although it could go as high as $13.1 billion. This is the company’s second share sale, following Aramco’s listing on the public markets in 2019, when it offered 1.5% of the company to investors.
Aramco’s crude oil production
That first sale raised a record $29.4 billion, making it the largest initial public offering (IPO) in history to date. Aramco is the world’s largest oil company in terms of daily crude oil production and market capitalization. Aramco is the world’s largest oil company in terms of daily crude oil production and market capitalization. Saudi Arabia could announce the historic sale of Aramco shares on Thursday. The final offering price will be announced next Friday and the shares will begin trading the following Sunday.
This latest offer comes at a critical time for the kingdom, which in early May recorded its sixth consecutive quarterly budget deficit, due to high spending on multi-billion dollar mega-projects and a simultaneous reduction in oil revenues.
However, economists point out that even a windfall from this new Aramco share sale will barely cover a small part of the costs of Saudi Arabia’s ambitious Vision 2030 economic diversification plan, which includes mammoth projects such as completely new cities and all the necessary infrastructure, and is expected to cost more than $1 trillion.
Saudi Arabia, the world’s largest crude exporter, currently owns 82.18 percent of Aramco’s shares, although this stake will be reduced to around 81.5 percent after the second share sale, according to Sunday’s statement.
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Source: Aramco
Photo: Shutterstock
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