Saudi Arabia has raised more than expected $1 billion from the sale of a stake in Aramco, after the end of what is called a stabilization period for the company's stock.
Aramco’s secondary offering raised $12.35 billion, according to a disclosure on the Saudi Stock Exchange. The energy giant last month sold a 0.64% stake in the company at 27.25 riyals per share, while allowing stabilizing manager Merrill Lynch to buy back an additional 154 million shares and return them to the government if the stock price falls below the offering price.
The stabilization period extends for 30 days after the end of the offering, during which no trading is conducted to achieve such stabilization. Aramco has previously indicated that the offering will raise at least $11.2 billion, and that the final size of the offering will depend on the amount of shares that Merrill Lynch may buy back during the stabilization period.
First bond issue in 3 years
Although Aramco’s latest secondary offering was smaller than the $30 billion initial public offering in 2019, it was a significant source of revenue for the Saudi government, which has increased its borrowing this year and expects a budget deficit until at least 2026 as it embarks on a massive spending plan to create jobs, develop entire new cities and launch new economic sectors.
Aramco is looking to raise at least $3 billion from its first bond offering in three years, according to a report published by Bloomberg yesterday, Tuesday, joining the frenzy of debt selling activity in the kingdom.
