20240611 aramco
Aramco, the mostly state-owned jewel of the Saudi economy, announced on May 30 that it would sell 1.545 billion shares. Image Credit: Reuters

Saudi Arabia raised $1 billion more than previously expected from the sale of a stake in oil producer Aramco after a so-called stabilisation period of the company’s shares ended.

The government netted a total of $12.35 billion from the secondary offering, according to a statement. It sold a 0.64 per cent stake in Aramco at 27.25 riyals a share last month, with an additional 154 million shares available for stabilising manager Merrill Lynch to buy back and return to the state if the stock dropped below the offer price.

The stabilisation period lasted for 30 days after the end of the share sale without any stabilisation trades taking place. Aramco previously said the offering raised a minimum of $11.2 billion, with the final size dependent on whether Merrill Lynch bought back any stock during the stabilisation period.

While a much smaller scale than Aramco’s nearly $30 billion initial public offering in 2019, the deal was still a key source of revenue for the government. It’s stepped up borrowing this year and is forecasting budget deficits out to at least 2026 as it embarks on a massive spending plan intended to create jobs and develop entirely new cities and kickstart new industries.

Aramco is looking to raise at least $3 billion from its first bond sale in three years, Bloomberg News reported on Tuesday, adding to the kingdom’s debt spree.