The company, also known as Maaden, is working with HSBC Holdings Plc’s Saudi Arabia unit on the possible offering that could happen later this year, some of the people said, asking not to be identified because the information is private. The size of the rights issue hasn’t been finalised and could end up being smaller than US$5 billion, they said.

The Public Investment Fund, which owns a 65% stake in the mining firm, would also participate in the rights issue through a debt-for-equity swap and exchange its loans to Maaden subsidiaries into equity, the people said.

Maaden, a so-called national champion in the kingdom’s economic diversification plan, has been looking for possible takeover targets, Chief Executive Officer Darren Davis said in an interview in April. The company is working with financial advisers including Michael Klein and JPMorgan Chase & Co. as it scouts for potential acquisitions, people familiar with the matter said in July.

Saudi metals maker Maaden to expand in phosphates and copper

Maaden shares declined as much as 2.1% on Monday to 48.7 riyals, the lowest since January, according to data compiled by Bloomberg. Maaden, PIF and HSBC’s Saudi Arabia unit all declined to comment