Saudi Arabia is getting ready to officially initiate a secondary offering of shares in the oil company Saudi Aramco, which is expected to generate over $10 billion, Bloomberg reported on Thursday citing informed sources.

The stock sale could take place as soon as Sunday, the newspaper added.

The government, which is Aramco’s largest shareholder, plans to run a book-building process to gather investor interest until next Thursday. The stock sale has already attracted informal interest from investors across the Middle East and Europe totaling over $10 billion.

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The deal terms and amount of shares to be put up for sale have not been finalized yet and could change, the sources added.

Since the beginning of the year, the oil giant's stock has fallen by about 11%. This week, the shares reached their lowest levels in approximately a year.

Bleeding pocket

In December 2019, Saudi Arabia sold 1.7 percent of its shares on the Saudi stock market, garnering around $29.4 billion in what was considered the world's largest IPO.

Crown Prince Mohammed bin Salman's ambitious Vision 2030 of economic transformation, which is set to require $1.5 trillion, is on shaky grounds, Bloomberg reported last month. The Kingdom is finding itself having to pay out of pocket for investors to come rather than the other way around, leading to a financial bleed in the oil-rich country's funds.

Already, there are signs of scaling back or completely aborting large-scale projects aimed at revitalizing its $1.1 trillion economy. The financial gap forced the government to issue billions of dollars in bonds to help address a fiscal deficit that it had not anticipated until late last year.

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Recently, the Kingdom assigned an additional $164 billion stake in Saudi Aramco to the fund, which is expected to yield a dividend payment of at least $20 billion this year.

The move is basically “raising money from one public pocket at the expense of the other,” said Mohamed Abu Basha, head of research at Cairo-based investment bank EFG Hermes, as quoted by Bloomberg.

Finance Minister Mohammed al-Jadaan has acknowledged a funding gap and indicated the possibility of issuing additional debt. He has been involved in a committee led by MBS that analyzed Vision 2030's extensive funding requirements and compared them with the Kingdom's projected revenue.

“There was a gap,” he told Thamanyah’s Socrates podcast. “We called it the Gap Study.”

He pointed out that delaying and shutting down some projects entirely would close this gap.