Saudi Arabia to raise $12 billion by selling more shares in Saudi Aramco amid Neom struggles

• Saudi Arabia is selling more shares in its state-owned oil company.
• The sale begins on Sunday, Saudi Aramco said.

Saudi Arabia is selling more shares in its oil company, Saudi Aramco.

The sale of a 0.64% stake in the state-owned company will begin on Sunday and is expected to raise about $12 billion.

The proceeds are expected to go to the kingdom's sovereign wealth fund — the Public Investment Fund.

Amin Nasser, chief executive of Saudi Aramco, said the offering would broaden its investor base and allow current and new investors to build positions at an "attractive" price in comments reported by The Financial Times.

The company paid dividends of $98 billion in 2023, a figure that is set to hit $124 billion this year.

The government of Saudi Arabia remains the largest shareholder in Aramco, which is the world's largest oil company by market value.

Aramco raised $25.6 billion in the world's biggest IPO in December 2019, selling 3 billion shares at 32 riyals ($8.53).

Shares have dipped about 12% this year to close at 29 riyals ($7.73) on Thursday. The offering will be priced at between 26.70 and 29 riyals.

The share sale comes amid Saudi Crown Prince Mohammed bin Salman's Vision 2030 plan to diversify the kingdom's economy and pivot away from oil.

The plan has involved big spending on sports, entertainment, and infrastructure.

The kingdom has embarked on a number of "gigaprojects" as part of the 2030 plan, including its Neom megacity.

The project, which is expected to cost at least $500 billion — with some estimates putting the figure at $1.5 trillion — includes the much-talked-about "The Line," a futuristic city in the northwest of the country.

But recent reports suggest Saudi Arabia has been seeking to borrow funds for the project, while also scaling back population estimates for The Line.

The Saudi government had previously said it wanted to move 1.5 million residents into The Line by 2030, but that number is now likely to be fewer than 300,000, Bloomberg reported in April.

And while the city was set to stretch 105 miles to the Red Sea, the Bloomberg report said that officials expected just 1.5 miles to be completed by 2030.

The PIF has also been hit with falling cash levels. In January, it said that its cash as of September had dropped to around $15 billion — the lowest level since December 2020, The Wall Street Journal reported.

Saudi Arabia's finance minister said in April that while the kingdom was "very pleased" with Vision 2030 progress, "challenges" meant adjustments would be made to some aspects of the project. Those statements were later rejected by the economy minister.