Saudi Arabia may announce landmark Aramco share sale

Saudi Arabia may announce a landmark secondary share offering in oil giant Aramco, pending final approval from Crown Prince Mohammed bin Salman, people with knowledge of the matter said.

The share offering on Riyadh's Saudi Exchange, which the sources said is expected to be launched on Sunday, is the culmination of a years-long effort to sell another chunk in one of the world's most valuable companies after its record-setting IPO in 2019 raised $29.4 billion.

Sources told Reuters last week the offering could happen as soon as June, with one adding it could raise around $10 billion.

Since the IPO, Aramco has continued to be a cash cow for the Saudi government as it finances a mammoth economic drive to end its "oil addiction", as the crown prince once called it.

The current deal will allow the kingdom to finance large domestic projects tied to that agenda, said Hasan Alhasan, senior fellow at the International Institute for Strategic Studies.

Having missed its target for foreign direct investment and with a budget deficit of up to $21 billion in sight, "the kingdom is resorting to the sale of equity in Aramco and to debt issuances", he said.

"The kingdom is likely to continue redirecting capital to other sectors including renewable energy, technology, tourism, logistics and manufacturing, which Riyadh hopes will constitute sources of long-term economic growth," he added.