Saudi Arabia has successfully sold over half of its $11.2 billion secondary share offering in Aramco to foreign investors, marking a significant step in the kingdom’s efforts to attract international capital and diversify its economy.
Despite past challenges in meeting foreign investment targets, this sale showcases a growing global interest in Saudi Arabia’s energy giant.
Strong Demand from Global Markets
Sources close to the matter revealed that “multiple orders” came from the U.S., UK, Hong Kong, and Japan. Interestingly, international demand for this secondary share sale even exceeded that of Aramco’s much-anticipated IPO in 2019.
On Friday, Aramco set the share price at 27.25 riyals ($7.27), falling within the previously announced range of 26.70-29.00 riyals. This secondary offering, codenamed “Project Bond” by participating banks, involved months of meticulous planning.
The transaction is set to bring over 120 new international investors into the Aramco fold. “The overall demand for the offering exceeded $65 billion, encompassing both global blue-chip institutions and domestic retail investors,” said one source.
Fueling Vision 2030 and Diversification Efforts
This share sale aligns with Crown Prince Mohammed bin Salman’s ambitious Vision 2030 plan. The initiative aims to diversify Saudi Arabia’s economy away from oil, funding projects ranging from electric vehicles to futuristic desert cities, primarily through the Public Investment Fund (PIF).
With assets of $925 billion, the PIF is refining its focus to drive Vision 2030 forward. The proceeds from this Aramco share sale will likely flow to the PIF, potentially supporting both giga-projects and addressing the kingdom’s budget deficit, which has widened due to weakened oil prices.