Saudi Arabia has announced plans to sell 1.545 billion shares of Aramco, which could raise $12 billion. In a statement, Aramco revealed that it plans to sell 0.64 percent of its shares with a price range between SAR26.70 and SAR29.00 per share. The offering comes after Aramco made its record-setting IPO in 2019, which raised $29.4 billion. The secondary public offering of Aramco’s ordinary shares will commence on Sunday, June 2, 2024, the statement added.
Aramco said in the statement that it will make the offering to institutional investors in Saudi Arabia and globally who qualify in accordance with the Rules for Foreign Investment in Securities to invest in listed securities. Moreover, the company will make the offering available to retail investors in Saudi Arabia and other GCC countries. In addition, the statement revealed that the company will reserve around 10 percent of the offering to retail investors.
Saudi Arabia’s diversification efforts
Saudi Arabia’s government is a majority shareholder in Aramco and heavily relies on the oil company to finance its diversification efforts under Vision 2030. In 2016, the government launched the diversification program which aims to invest in the non-oil sector to diversify the economy away from dependence on oil.
In light of the decline in oil prices and oil production cuts, Saudi Arabia’s economy saw a 1.8 percent decline in the first quarter of 2024. However, its non-oil sector maintained its expansion.
In an effort to stabilize oil prices, Saudi Arabia and other OPEC+ members have been reducing oil output. In April, OPEC+ extended voluntary oil output cuts of 2.2 million barrels per day until the end of June. During the upcoming meeting on June 2, the group will likely extend the cuts further into the second half of the year.
Read: Oil prices extend losses as U.S. product stockpiles grow, China activity slows
Aramco seeks expansion
Despite the decline in oil prices, Aramco has expanded its investments in refineries and petrochemical projects in China and other countries. Moreover, the company expanded its retail and trading businesses and focused more on gas with its first venture into liquefied natural gas last year.
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