Significant Foreign Interest in $11.2 Billion Secondary Offering as Kingdom Pursues Economic Reforms
RIYADH: In its recent share sale, oil giant Saudi Aramco announced on Sunday that a significant portion of the shares was acquired by international investors. This move, set to raise approximately $11.2 billion, saw the majority of the institutional tranche of shares allocated to investors outside Saudi Arabia.
A statement from Aramco revealed that foreign investors were primarily responsible for the uptake, reflecting substantial global interest. Around 58% of the shares in the current offering were allocated to international investors, a notable increase from the approximately 23% allocated during Aramco’s record-breaking initial public offering (IPO) in 2019.
According to sources familiar with the matter, who spoke on condition of anonymity, the majority of foreign orders came from the European Union and the United States, with significant interest also reported from Japan, Hong Kong, and Australia.
Announced on May 30, Aramco’s secondary offering involved selling 1.545 billion shares, representing about 0.64% of the company’s total issued shares, on the Saudi stock exchange. The offering aims to provide a short-term financial boost to Saudi Arabia as it continues to fund large-scale development projects, including resorts and stadiums, aligned with its Vision 2030 economic reform agenda.
This sale is seen as a critical test of foreign investor confidence in Saudi Arabia’s economic transformation, which features ambitious projects like NEOM, a proposed futuristic city in the desert.
Saudi Arabia, the world’s largest exporter of crude oil, now holds around 81.5% of Aramco following the second share sale. The shares were priced at 27.25 Saudi riyals ($7.27) each, near the lower end of the previously announced range of 26.70 to 29 Saudi riyals. As of Thursday’s market close, Aramco’s shares traded at 28.30 Saudi riyals, giving the company a market capitalization of approximately $1.83 trillion.
