Saudi Arabia is reportedly contemplating the revival of plans for a subsequent share offering in its state oil company, Saudi Aramco. The objective of this offering would be to raise a minimum of SAR40 billion ($10 billion) as early as February, Bloomberg reported, citing people familiar with the matter.
This development comes in the wake of the Saudi government’s directive on January 30th instructing Aramco to halt its oil expansion plan. An industry insider informed Reuters that this surprise reversal had been in the works for at least six months and was driven by uncertainty surrounding the market’s demand for additional spare capacity.
As the largest oil company in the world, Saudi Aramco boasts a market value of $2.02 trillion. In late 2019, it completed the largest initial public offering (IPO) ever, raising $25.6 billion, and subsequently sold more shares to bring the total to $29.4 billion.
Following the news of the potential follow-on offering, the company’s shares experienced a decline of approximately 2 percent.
Based on data from the London Stock Exchange Group (LSEG), the Saudi government directly holds a 90.19 percent stake in Aramco, while the sovereign Public Investment Fund (PIF) holds 4 percent and PIF subsidiary Sanabil holds another 4 percent.
In September 2023, global media reported that Aramco was contemplating a secondary share offering on the Riyadh stock exchange, potentially selling a stake worth up to $50 billion after engaging in discussions with advisors.
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