Saudi Arabia’s state-owned oil giant Aramco commenced its secondary public offering on Sunday, aiming to raise around $12 billion. The books opened early Sunday morning, offering a price range between 26.70 Saudi riyals ($7.12) and 29 Saudi riyals per share.
Aramco announced its plan on Thursday to sell 1.545 billion shares, representing approximately 0.64% stake. At the midpoint of the price range, the sale would total around $11.5 billion, but it could potentially reach up to $13.1 billion.
Four additional banks, including Credit Suisse Saudi Arabia and BNP Paribas, have been added to the share offering, as reported by Reuters on Sunday.
This secondary offering marks Aramco’s second entry into public markets after its record-breaking initial public offering (IPO) in 2019, where it offered 1.5% of the company to investors and raised $29.4 billion, making it the largest IPO in history. Aramco is the world’s largest oil company in terms of both daily crude production and market capitalisation.
The timing of the latest offering is opportune for the kingdom, which recorded its sixth consecutive quarterly budget deficit in early May due to high spending on multi-trillion-dollar megaprojects and lower oil revenues.
However, economists note that even a financial windfall from another Aramco stock sale will barely make a dent in the costs of Saudi Arabia’s Vision 2030 diversification plans, which include giga projects such as entirely new cities and all the necessary infrastructure, projected to cost more than a trillion dollars.
Earlier in June, Saudi Aramco’s top executives were set to embark on a series of events in London and the United States to generate demand for the oil giant’s $12 billion share sale.
The $1.8 trillion oil giant’s offer was fully covered within just a few hours after the deal opened, indicating strong demand. While it is unclear how much of the demand came from overseas investors, reports suggest that the order book reflected a mix of local and foreign investors.
The Saudi government currently owns about 82% of Aramco, while the Public Investment Fund holds a further 16% stake. The kingdom will continue to be the main shareholder after the offering, which contributes to Riyadh’s efforts to raise cash and address a budget deficit.