Saudi Arabia and its bankers will on Sunday morning start taking orders for as much as $13.1 billion worth of shares in its energy giant Aramco (2222.SE), opens new tab, in a major test of international investor interest in its market.
In a long-anticipated announcement on Thursday, the kingdom and Aramco detailed plans to sell up to a 0.7% in the state-controlled oil company, with 10% of the offering reserved for retail investors, based on demand. Order-taking will run through June 6 and the deal will price on June 7.
The offering - codenamed Project Bond according to sources - has been trailed for months as a key step in diversifying the company's investor base since its record-breaking initial public offering (IPO) in 2019, as well as for its potential to further fuel the kingdom's massive economic diversification programme.
It also marks a test of interest in Saudi markets after lukewarm interest from international investors in the 2019 flotation amid concerns about a high valuation, Saudi government control and the energy transition away from hydrocarbons.
International investors have been similarly reticent about the kingdom's mega-projects, from beach resorts to new cities.
Investors buying into Aramco will need to weigh environmental concerns against its rich payouts.
"Since the IPO, higher expectations on dividend payout and oil price have outweighed lower expectations on output," said Hasnain Malik, head of equity research, at Dubai-based Tellimer.
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