Majority of Aramco Shares in $11.2 Billion Sale Go to Foreign Investors

Over half of Aramco's $11.2B share sale goes to foreign investors, boosting Saudi Arabia's Vision 2030 plans to diversify the economy beyond oil dependency.

Jun 8, 2024 - 09:33
Jun 8, 2024 - 09:34
Majority of Aramco Shares in $11.2 Billion Sale Go to Foreign Investors
Majority of Aramco Shares in $11.2 Billion Sale Go to Foreign Investors

Over half of the $11.2 billion share sale of Aramco has been allocated to foreign investors, according to insiders.

Saudi Arabia is aiming to attract international investments to support its economic diversification efforts. Despite these efforts, foreign investment has often fallen short of targets.

"Orders came from the U.S., UK, Hong Kong, and Japan," one insider revealed.

The international interest in this secondary share sale surpassed the demand seen during Aramco's initial public offering in 2019, insiders have previously indicated.

On Friday, Aramco announced that shares were priced at 27.25 riyals ($7.27), following a set price range of 26.70-29.00 riyals.

The secondary offering, referred to as Project Bond by the banks involved, required extensive planning over several months.

This transaction is expected to bring in more than 120 new international investors to Aramco, one insider added.

"The total demand for the offering exceeded $65 billion from global blue chip institutions and domestic retail investors," the insider noted.

Crown Prince Mohammed bin Salman's Vision 2030 initiative aims to fund various projects, from electric vehicles to futuristic cities in the desert, primarily through the Public Investment Fund (PIF).

With a value of $925 billion, the sovereign fund has scaled back some of its major projects to concentrate on driving the vision forward more effectively.

Proceeds from the share sale are anticipated to be directed towards the PIF, although they may also be used to address the kingdom's budget deficit, which has increased due to declining oil prices, according to sources and analysts.

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