According to sources cited by Bloomberg, Saudi Arabia is reportedly nearing the sale of a new stake in Aramco, the state-owned oil company, which is set to be worth billions of dollars in the near future. The initial public offering (IPO) is expected to be the world’s largest in recent years.
The Kingdom is reportedly working with a number of advisors to study the feasibility of an additional offering on the Riyadh stock exchange, according to Bloomberg’s sources. They said that a decision could be made in the coming weeks on whether to proceed.
The sources said the Aramco offering could take place later this year if the government moves forward, although a specific timetable has not been set. Even a 1% offering would raise over $20 billion for the Kingdom, as it pursues an ambitious investment plan to diversify its economy. The Saudi government directly owns about 90% of Aramco, while the Saudi Public Investment Fund (PIF) owns another 8%.
Read more: Despite Q1 profit hit, Aramco shares up on new dividend policy
The market value of the world’s largest energy company is approximately $2.1 trillion. The firm’s stocks have outperformed those of Western oil giants like ExxonMobil Corp. this year.
Dividend distributions increase
The sources did not confirm the final value of the potential deal, and the Kingdom may decide not to proceed if market conditions are unfavorable, according to Bloomberg.
Any secondary offering of Aramco shares could attract new investors after the company increased its core dividends in March and said in May that it would also pay more in dividends to shareholders. The additional dividends are estimated to be up to $20 billion this year, according to analysts, which adds to the appeal of Aramco, already the world’s largest company by dividend size.
Aramco raised nearly $30 billion from its initial public offering (IPO) in 2019, the largest ever, despite relying almost entirely on local investors.
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