In a strategic move that could yield approximately $10 billion, Saudi Arabia is poised to conduct a substantial share sale of its state-owned oil colossus, Aramco. Anticipated to occur by June, this event is expected to be one of the largest stock transactions in the Middle East in recent memory.
The process will see a fully marketed offering taking place on the Riyadh stock exchange, a more meticulous approach compared to an expedited sale over a short period. While the intricacies of the deal are being refined, sources indicate that plans are still subject to modification.
When solicited for comments, an Aramco representative maintained that decisions pertaining to share sales are under the purview of the shareholders and declined to comment further. Similarly, the Saudi government’s communication office has not promptly replied to inquiries for comment.
Prestigious global banks such as Citigroup, Goldman Sachs, and HSBC have been enlisted to orchestrate the sale, showcasing the significant interest of the international banking sector in the transaction.
The sale is in alignment with Saudi Arabia’s Vision 2030, a sweeping reform initiative targeting the diversification of the nation’s economy and diminishing its reliance on oil income. With Aramco accounting for a hefty 90 percent ownership by the Saudi government, the company’s financial performance is vital to the kingdom’s economic transition.
Although a dip in earnings was reported in the first quarter due to lower oil prices and sales volumes, Aramco continues to be a linchpin in the financial stability of the country. The firm has announced its intention to distribute $31 billion in dividends, reinforcing its profitable status and significance to the fiscal well-being of Saudi Arabia.
Since Aramco’s landmark initial public offering in 2019, which saw its shares introduced at 32 riyals, the stock has witnessed varied performance, peaking at 38.64 riyals the previous year. The most recent trading session concluded with Aramco shares at 29.95 riyals.
The forthcoming share sale not only represents a pivotal financial undertaking but also marks a step towards fulfilling the extensive goals of Vision 2030, charting a course for a diversified and resilient economic future for Saudi Arabia.