Will Saudi Aramco's massive share sale to raise $12B pay off?
Saudi Arabia is selling a 0.64% stake in its state energy company in a bid to offset rising debt and fund its economic diversification plans, but foreign investors remain wary.
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DUBAI — Saudi Arabia kicked off on Sunday a long-anticipated sale of another chunk of Saudi Aramco, the state energy company, to local and international investors. The sale of a new 0.64% stake in the crown jewel of the Saudi economy is expected to be completed by June 11 and is anticipated to raise up to $12 billion. It follows the initial sale in 2019 by the Saudi government of a 1.7% stake in the kingdom’s energy company. The shares were sold on the local stock market, attracting various buyers from institutional to retail, local and international investors.
Saudi Aramco said the proceeds of the offering will go to the Saudi government, which was the sole owner up until 2019, when the first IPO took place, and has seen its share in the oil company drop to 81.5% after the latest sale.
The gradual transfer of ownership is depriving the Saudi government of part of Aramco’s dividend payments, instead transferring the company’s profits to investors, most notably the Saudi Public Investment Fund and its subsidiaries, which have owned a 16% stake in the company since March 2024.
