The Kuwaiti government has indicated that it will invest up to $1 billion in the initial public offer for Saudi Aramco, as the Kingdom requests regional allies to boost sales of its record selling shares, according to people familiar with the matter.
It appears that the Kuwait Investment Authority was reluctant to allocate large funds for public subscription, but the government told it that this step was in the country’s strategic interest. Kuwait sent its decision to the Aramco administration on Monday.
Kuwait’s decision comes after Abu Dhabi, the oil-rich member in the United Arab Emirates, announced that it had decided to invest $1.5 billion in Aramco, according to informed government sources.
Yet n another major investor from the Gulf region will be a relief to the Kingdom of Saudi Arabia after abandoning the IPO globally plans. Aramco had high hopes to benefit from sovereign investors, including large purchase packages from China, but has not yet announced any firm commitments.
Saudi Arabia is looking to raise more than $25 billion to sell a 1.5 percent stake in the world’s largest oil producer. The institutional part of the subscription now has offers totaling 144 billion riyals ($38 billion), which will cover this portion of the proposed sale 2.3 times.