Aramco to Offer New Shares Worth $10-20 Billion
According to the Wall Street Journal, Saudi Arabian oil giant Aramco is set to offer new shares worth between $10 billion and $20 billion as early as this week. The Saudi state and its sovereign wealth fund, the Public Investment Fund, hold the majority of Aramco's shares, with only 1.5% of the company's shares publicly traded on the Tadawul, the Saudi stock exchange, following its initial public offering (IPO) in 2019.
During its IPO, a record $29.4 billion was raised, making it the largest stock market debut in history. Aramco is the world's largest oil company in terms of daily oil production and market capitalization.
This plan comes at an opportune time for Saudi Arabia, which has just recorded its sixth consecutive quarterly budget deficit due to high expenditures on multi-billion-dollar megaprojects and a simultaneous decline in oil revenues.
If the offering materializes, it will help alleviate the financial pressure on Saudi public finances, at least in the short term. The latest figures from May indicate a budget deficit of $21 billion for the entire year, as well as deficits in 2025 and 2026. The sale makes sense.