Saudi to raise $11.2b in Aramco shares

Saudi Arabia is poised to raise more than $11.2 billion selling shares in oil giant Aramco to help fund its spending plans, after pricing the stock at the lower end of its expectations, the company said on Friday. Aramco shares were priced at 27.25 riyals ($7.27) after the company set a price range of 26.7 to 29.0 riyals.

The offering was covered four to five times, a person familiar with the matter said. International demand was greater than for Aramco’s IPO in 2019, two people said, and included interest from China, elsewhere in Asia as well as Europe, another person said. Saudi Arabia has been seeking to lure international investment to pour tens of billions of dollars into projects to diversify away from its reliance on oil.

Saudi Crown Prince Mohammed Bin Salman’s Vision 2030 is funding endeavours as diverse as electric vehicles to building futuristic cities in the desert, mainly via its Public Investment Fund (PIF).

The $925 billion sovereign fund, after scaling back some of its flagship “giga-projects”, aims to sharpen its focus to drive forward the vision, Reuters has reported. Proceeds from the share sale are likely to be funnelled to the PIF, sources and analysts have said, though funds could also help plug the kingdom’s budget deficit.

Aramco’s shares were sold at a nearly 4 per cent discount to where they closed on Thursday, valuing the company at about $1.76 trillion.