Plane makers plot course through trade and Brexit worries at Farnborough Airshow

FILE PHOTO: Employees are pictured as the first Boeing 737 MAX 7 is unveiled in Renton, Washington, U.S. February 5, 2018. REUTERS/Jason Redmond/File Photo
Updated 16 July 2018

Plane makers plot course through trade and Brexit worries at Farnborough Airshow

FARNBOROUGH: Aerospace firms are setting out wares from luxury jets to lethal drones at back-to-back British air shows this week, hoping trade tensions will not deter airlines from buying jetliners even as geopolitical uncertainty allows them to sell more weapons.
In the quintessentially English atmosphere of the Royal International Air Tattoo, gives way on Monday to the Farnborough Airshow, where deals in the $800 billion aerospace and defense sector will be done.
Trade tensions between the US and China and Europe, disputes over the consequences of Britain’s exit from the EU and an increase in global protectionist rhetoric have barely dented a prolonged industry boom.
“The overall environment will reflect industry health, despite the dark clouds of Brexit and other global trade setbacks in the background,” said analyst Richard Aboulafia of Teal Group.
“We’ll see more of what we’ve seen for years: Aviation remaining a strangely protected and happy corner of a turbulent world.”
Boeing is expected to confirm demand for air transport is rising after Airbus lifted forecasts last week, citing strong economic growth in emerging markets and replacing older planes in Western markets.
The two giants will add to record orders for narrowbody jets, whose waiting lists underpin their near-record share price, while seeking a recovery in sales of bigger jets.
Boeing will be looking for a boost to its largest twinjet, the future 777X.
Airbus will hope to end uncertainty over AirAsia’s support for its A330 neo jet, which could also involve a deal for smaller planes, though doubts have been expressed over financial commitments to Airbus.


Saudi Aramco sets IPO share price between 30-32 riyals

Updated 24 min 44 sec ago

Saudi Aramco sets IPO share price between 30-32 riyals

  • Final pricing for the Aramco shares would be announced on December 5

DUBAI: Saudi Aramco’s multibillion-dollar initial public offering (IPO), probably the biggest in history, shifted to full gear as its share price was announced and subscription to the world’s biggest oil company commenced on Sunday.

Saudi Aramco set an indicative share price between 30 and 32 riyals for the 1.5 percent of its oustanding shares – or about 3 billion shares of its 20 billion regular shares – that it would offer for the domestic part of its public offering. The blockbuster IPO could be worth least $24 billion, and values the state-owned oil giant at up to $1.71 trillion.

The offering – or book-building – period for institutional subscribers, which started today, closes on December 4 while the retail offering for individual investors will begin on November 21 and will end on November 28. Individual investors will subscribe based on a price of 32 riyals, the top end of the price range, the company noted in a document.

The final pricing for the Aramco shares would be announced on December 5, and Saudi Tadawul  – the Kingdom’s stock exchange – would make an announcement when initial trading day would be, the company added.

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For more of our coverage of the Aramco IPO, click here.

To view key Aramco IPO documents, click here.

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Samba Capital & Investment Management Company has been designated as issue manager while National Commercial Bank, Saudi British Bank, Samba Financial Group, Saudi Investment Bank, Alawwal Bank, Arab National Bank, Albilad Bank, Aljazira Bank, Riyad Bank, Al Rajhi Bank, Alinma Bank, Banque Saudi Fransi and Gulf International Bank were named as receiving banks.

If there are applications for more than the 0.5 percent on offer — amounting to 1 billion shares — allocations to private investors will be scaled back proportionate to demand; if there are fewer applications than the 0.5 percent when all maximum applications are satisfied, private investors can have the over-payment refunded either in cash via the receiving banks or in the form of extra shares in Aramco.

There is an incentive mechanism in the IPO whereby Saudi investors will receive a bonus one-for-ten allocation of shares, up to a maximum of 100 shares, if they do not sell shares in the market for a period of six months after dealings begin in December, at a date still to be determined.

Saudi Aramco also intends to buy $1 billion worth of shares for employees under a plan to incentivize executives and staff members alongside the IPO next month.

The plan — which was disclosed in the IPO prospectus — will involve Aramco buying the shares from the government and making them available for employees under special terms.