Saudi Aramco 1.4pc float values company at US$1.7 trillionBusiness | 18 Nov 2019 11:01 am
Saudi Arabia's state-owned oil giant Aramco announced yesterday it will sell a 1.5 percent stake in the company as it looks to raise US$25.6 billion from the sale, potentially becoming the most-valuable initial public offering in history.
The newly released figures also revealed a valuation for the company that's between US$1.6 trillion and US$1.7 trillion, a figure that fell short of the US$2 trillion mark Crown Prince Mohammed bin Salman had sought.
Still, a 1.5 percent flotation could raise between US$24 billion and US$25.6 billion to help fuel the Saudi economy. Saudi Aramco announced it will have 200 billion regular shares, selling 1.5 percent or what is 3 billion shares.
Aramco set a stock price range of 30 to 32 Saudi riyals, or US$8 to US$8.50 a share for investors.
The company is selling 0.5 percent to individual investors, which will include Saudi citizens, residents of Saudi Arabia and Gulf Arab nationals, and 1 percent to institutional investors, which could include major Chinese and Russian buyers.
Aramco will announce the final price for the stock when the book-building period ends on December 5. Trading on the local Tadawul exchange in Riyadh is expected to happen sometime in mid-December.
The highly anticipated sale of a sliver of the company has been generating global buzz because it could clock in as the world's biggest initial public offering, surpassing record holder Alibaba whose IPO raised US$21.8 billion on its first day of trading in 2014. Facebook raised US$16 billion in its 2012 IPO.
Saudi Aramco is the kingdom's oil and gas producer, pumping more than 10 million barrels of crude oil a day, or some 10 percen of global demand. The firm's net income in 2018 was US$111.1 billion, far beyond the combined net income of oil giants BP PLC, Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell PLC and Total SA.-AP