Saturday 15 June 2024

War, Money, Oil and the Shaping of Aramco’s Giant Share Sale - Bloomberg

War, Money, Oil and the Shaping of Aramco’s Giant Share Sale - Bloomberg

As the boss of the world’s biggest oil company flew around the world in early June to drum up investor interest in one of the biggest share sales in recent years, he could breathe a sigh of relief.

Five years after Aramco’s $29.4 billion listing had been marred by temper tantrums and U-turns that left it almost entirely reliant on local investors, Amin Nasser and a coterie of top Wall Street bankers had finally delivered the international deal Crown Prince Mohammed bin Salman always wanted.

A large chunk of this month’s $11.2 billion share sale was allocated to foreign investors, leading one person involved in the process to describe it as the deal the IPO was supposed to be. Its success could create a template for future Aramco sell downs, which now seem likely as the Crown Prince — who’s known as MBS — seeks cash to help fund his multitrillion-dollar Vision 2030 economic transformation project.

“We’re seeing an ‘all of the above’ attempt to raise investment capital for the Vision 2030 gigaprojects,” said Jim Krane, a fellow at Rice University’s Baker Institute for Public Policy in Houston. “Since the hoped-for FDI flows haven’t fully materialized, the Saudi government has turned to its tried-and-true backstop: Aramco.”

This account of the share sale, which Bloomberg News first reported in January, is based on interviews with dozens of people directly involved in the offering, who asked not to be identified discussing private meetings and conversations. Representatives for Aramco and the Saudi government did not respond to requests for comment.

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