According to informed sources, Saudi Arabia plans to raise more than $11.2 billion through a secondary offering of its oil giant Aramco, priced at 27.25 riyals (about $7.27) per share, near the lower end of the pricing range.
A knowledgeable source stated that Aramco's orders at the bottom of the pricing range (26.7 to 29 riyals) were oversubscribed by four to five times.
Aramco has not immediately commented, and the Saudi government communications office has also not immediately responded to requests for comments.
Foreign investment is a crucial pillar of Saudi Crown Prince Mohammed bin Salman's push for economic diversification, despite multiple missed targets. This offering is a new test of the country's ability to attract overseas capital, though it remains unclear to what extent international investors are interested in this stock sale.
This initiative, known as "Vision 2030," has invested billions of dollars through the Public Investment Fund (PIF) into projects such as electric vehicles and future cities in the desert.
Sources and analysts indicate that the PIF is likely to benefit from the proceeds of this stock sale, although some believe part of the funds may also be used to cover the budget deficit that the country might face this year.
The pricing is nearly 4% below Aramco's closing price on Thursday, valuing Aramco at approximately $1.76 trillion. Based on Thursday's stock price, its market capitalization is about $1.83 trillion.
The Saudi government is selling about 0.64% of Aramco's shares in this offering. Through the so-called green shoe option, the offering size could increase to 0.7%, allowing bankers to use the shares to stabilize the offering price.
If this option is exercised, Aramco will raise approximately $12.36 billion. As the world's largest oil exporter, Aramco also exercised the green shoe option after its initial public offering (IPO) in 2019, raising $29.4 billion, which remains the world's largest IPO to date.
