Black Gold Bonanza

Black Gold Bonanza

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  • Saudi Arabia is progressing with plans for a significant stock offering, reportedly in discussions to enlist top Wall Street banks for a secondary share sale in oil behemoth Aramco. The kingdom is likely eyeing JPMorgan Chase & Co. as one of the primary underwriters for the offering, with Bank of America Corp. and Morgan Stanley also vying for lead roles. The deal, expected to raise up to $20 billion, is attracting considerable attention from major financial institutions. Reports indicate that Citigroup Inc., Goldman Sachs Group Inc., and HSBC Holdings Plc are already lined up to work on the offering, with boutique bank Moelis & Co. serving as a financial adviser to assist in selecting underwriters for the deal. However, the final lineup of advisers may undergo changes, with additional banks likely to join before the deal commences.

  • Details such as the timing of the sale and the number of shares the government will offer remain undecided, but it's anticipated to follow a marketed offering structure. A successful secondary offering could provide essential funding for Saudi Arabia's ambitious economic diversification initiatives spearheaded by Crown Prince Mohammed bin Salman. Despite fluctuations in energy prices and production, Aramco remains robust, recently increasing its dividend payout to $31 billion following the government's transfer of a substantial stake in the oil giant to the Public Investment Fund.

Why it matters

For Wall Street banks, securing a role in this offering could open doors to further business opportunities in the kingdom as it moves forward with its economic transformation agenda.


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