The Saudi Arabian government has reportedly submitted documents to initiate the sale of a new stake in state-owned energy company Aramco with an aim to generate up to $13.1bn.
The move is anticipated to support Crown Prince Mohammed bin Salman’s strategy to broaden the country’s economic base, reported Reuters.
In the core of the arrangement, Saudi Arabia stands to potentially amass $12bn by presenting approximately 1.545 billion shares of Aramco. This represents about 0.64% of the company, if the sale is priced at the upper boundary of a range between SAR26.7 ($7.12) and SAR29 ($7.73), as detailed in Aramco’s filing on the Saudi Exchange in Riyadh.
The overall value of the deal could move up to $13.1bn at the top end with the inclusion of a so-called greenshoe option, which would permit the sale of nearly 1.7 billion shares, equating to a 0.7% stake. This option empowers bankers to utilise shares to stabilise the offering’s price, wrote the news agency.
Aramco CEO Amin Nasser has been quoted by the publication, as saying: “The offering provides us with an opportunity to broaden the shareholder base amongst both Saudi and international investors.
“It also offers us an opportunity to increase liquidity and to increase our global index weighting.”
The offering marks the conclusion of years of efforts to sell another portion of the Saudi company, following its IPO in 2019, which fetched $29.4bn. Approximately 10% of the latest offering will be set aside for retail investors, contingent upon demand, reported Reuters.
Earlier this month, the Saudi energy company unveiled its financial results for Q1 2024, reporting a net income of $27.3bn, a decrease from $31.9bn in Q1 2023. Operating cash flow for the reported quarter amounted to $33.6bn.
Aramco recorded a total hydrocarbon production of 12.4 million barrels of oil equivalent per day (mmboed) during the first quarter. Additionally, the company announced the addition of 15 trillion standard cubic feet (tscf) of raw gas and two billion stock tank barrels of condensate as proven reserves at the Jafurah unconventional field.
