Saudi Aramco sets IPO share price between 30-32 riyals for ‘sale of the century’

Saudi Aramco also intends to buy $1 billion worth of shares for employees under a plan to incentivize executives and staff members. (AFP)
Updated 18 November 2019

Saudi Aramco sets IPO share price between 30-32 riyals for ‘sale of the century’

  • Final pricing for the Aramco shares would be announced on Dec. 5
  • The IPO could be worth least $24 billion, and values the state-owned oil giant at up to $1.71 trillion

DUBAI: The Saudi Arabian “sale of the century” — the initial public offering of shares in Saudi Aramco — moved into top gear with the announcement of pricing details and official valuation of the most profitable company in the world.

The Kingdom will sell a total of 3 billion shares in Aramco — around 1.5 percent of the total — at a valuation between SR30 ($8) and SR32 per shares, giving a total valuation of between $1.6 trillion and $1.7 trillion, making it the most valuable company in history.

Investment professionals welcomed the valuation, which was lower than the highest estimates of Aramco’s worth, as a “compromise” between the Kingdom and the financial world.

Tarek Fadhallah, CEO of Nomura Asset Management in the Middle East, said: “My first impression is that the price is a sensible compromise and that it will sell the IPO.”

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To view key Aramco IPO documents, click here.

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Setting the price range and the number of shares to be sold starts the “bookbuilidng” process during which Aramco and its advisers will consult with potential investors and await bids from the institutions and private investors to decide at what level the shares will finally be sold.

A final pricing decision will come on Dec. 5, and trading is expected to start on the Tadawul shortly after.

Private investors — Saudi nationals, resident expatriates and Gulf nationals — will have to decide how many shares they want at the SR32 level, and wait to see if their application will be met in full.

If the final price is set lower than the top of the range, investors can have their money refunded or take up extra shares to an equivalent value.Aramco has decided not to market the shares via “roadshows” in certain markets because of a relaxation of Riyadh market rules that will allows foreign investors to buy shares on Tadawul.

The value of the stock on offer in the IPO will be between $24 billion and $25.6 billion — beating the existing record for a share issue set by Alibaba on the New York Stock exchange in 2014.

The proceeds from the sale — earmarked for investment into the diversification of the Saudi economy under the Vision 2030 reform plans — could go even higher depending on demand, with an extra chunk of shares allocated to advisers as part of the price stabilization mechanism.

Aramco is also committed to buying $1 billion in shares for its employees in an incentive scheme.


MoU signed to facilitate investment in Saudi Arabia

Updated 20 min 42 sec ago

MoU signed to facilitate investment in Saudi Arabia

RIYADH: The Saudi Arabian General Investment Authority (SAGIA) and the Diriyah Gate Development Authority (DGDA) signed a memorandum of understanding (MoU) to step up cooperation, the Saudi Press Agency reported on Thursday.

Under the MoU, the two authorities will establish a joint working group to boost cooperation in several areas including facilitation provided to investors, conducting economic studies of the market, building partnerships with commercial and industrial bodies and local companies, launching businesses, promoting the ease of doing business, providing logistic support, participating in local and international exhibitions, forums and special visits and exchanging knowledge and information.

All this will predominantly be in aid of attracting local and foreign investors. 

“SAGIA believes in the importance of such cooperation that can unify and multiply the efforts in a way that sets the world’s attention on the Kingdom’s cultural and heritage treasures and investment opportunities,” said SAGIA Gov. Ibrahim Al-Omar.

“This is done through close cooperation with DGDA to highlight these opportunities and market them internationally and locally. This MoU is a step in the right direction to achieve the objectives and directives of both bodies.”

Jerry Inzerillo, CEO of the DGDA, said: “Cooperating with SAGIA is one of the most important international investment motors to attract local and international investments to the Kingdom. This comes at a time where developing the Kingdom’s investment infrastructure is found within the objectives of its Vision 2030.

“At DGDA, we aim at attracting the best technologies and regional and international investments to the Kingdom. This will contribute to the improvement of the local economy and promote our objectives seeking to turn Diriyah into the Kingdom’s gem and an international economic tourist destination,” he added.