The Kingdom of Saudi Arabia is setting the stage for a significant share sale in its state-owned energy behemoth, Aramco. Anticipated to occur as early as June, the sale is poised to be one of the largest equity offerings in the region, according to informed sources.
An estimated $10 billion could be raised through the sale, a figure based on initial discussions. While the sale’s specifics are being finalized, sources close to the matter, who requested anonymity, indicated that the plan is in motion, although subject to modifications.
It is expected that the Aramco shares will be made available on the Riyadh stock exchange through a traditional, fully marketed offering, rather than an expedited process that would take place over several days.
In response to inquiries, Aramco stated that decisions regarding share sales fall under the purview of its shareholders and declined to provide further comments.
Requests for comment from the government’s communication office have not received immediate responses.
Financial institutions, including Citigroup, Goldman Sachs, and HSBC, are reportedly being considered to oversee the share sale, as previously reported by reputable sources.
The share sale initiative forms part of Saudi Arabia’s strategic economic reform, Vision 2030, which aims to diversify the nation’s economic base beyond oil and enhance the role of the private sector.
Currently, the Saudi government is Aramco’s predominant shareholder, holding a 90% stake, and it significantly depends on the financial dividends the company provides.
Despite a downturn in earnings for the first quarter due to diminished oil prices and reduced sales volumes, Aramco has projected dividend payments amounting to $31 billion, as stated earlier this month.
Following its historic 2019 initial public offering, the largest of its kind globally, Aramco’s stock has experienced fluctuations. Shares initially priced at 32 riyals have seen a peak of 38.64 riyals and most recently closed at 29.95 riyals.