Kuwait to Invest as Much as $1 Billion in Saudi Aramco IPO

An employee inspects pipes used for landing and unloading crude and refined oil at the North Pier Terminal, operated by Saudi Aramco
An employee inspects pipes used for landing and unloading crude and refined oil at the North Pier Terminal, operated by Saudi Aramco, in Ras Tanura, Saudi Arabia, on Monday, Oct. 1, 2018. Saudi Aramco aims to become a global refiner and chemical maker, seeking to profit from parts of the oil industry where demand is growing the fastest while also underpinning the kingdom’s economic diversification. Photographer: Simon Dawson/Bloomberg

(Bloomberg) –Kuwait’s government will invest as much as $1 billion in the initial public offering of Saudi Aramco as the kingdom asks regional allies to bolster the record share sale, according to people familiar with the matter.

The Kuwait Investment Authority had been reluctant to commit significant funds to the IPO, but was told by the government that a stake was in the country’s strategic interest, the people said, asking not to be identified discussing a confidential matter. Kuwait communicated its decision to Aramco on Monday.

Kuwait’s decision follows Abu Dhabi, the oil-rich member of the United Emirates, which has decided to invest $1.5 billion in Aramco, people familiar with the matter said last week.

Read: Kuwait, Bahrain wealth funds to consider investing in Aramco IPO

Bringing in another major investor from the Gulf region will be a relief for Saudi Arabia after plans to market the IPO globally were abandoned. Aramco had high hopes of drawing in sovereign investors, including a big purchase from China, but has yet to announce any firm commitments.

Saudi Arabia is looking to raise more than $25 billion selling a 1.5% stake in the world’s largest oil producer. The institutional part of the book now has bids totaling 144 billion riyals ($38 billion), covering that part of the proposed sale 2.3 times.

Read: Aramco IPO bids reach $44.3 billion as retail offer closes

Kuwait Investment Authority officials couldn’t be reached for comment. Saudi Aramco declined to comment.

–With assistance from Julian Lee.

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