$25.6 billion Saudi Aramco flotation smashes share sale world record

Saudi Aramco has priced its initial public offering at SR32 ($8.53) per share. (Aramco)
Updated 07 December 2019

$25.6 billion Saudi Aramco flotation smashes share sale world record

  • Initial offering values oil giant at $1.7 trillion — the same as Google and Amazon combined
  • The IPO will raise $25.6 billion beating Alibaba's record $25 billion listing in 2014

DUBAI: The biggest share listing in history — the initial public offering (IPO) of shares in Saudi Aramco — will take place on the Tadawul stock exchange in the next 10 days after the world’s most profitable company announced the results of its offer for sale.

Aramco shares will be priced at the top of the range on offer — SR32 per share — after strong demand from Saudi and regional investors, who bid for nearly five times the number of shares on offer.

That values Aramco at $1.7 trillion, bigger than any other quoted company in the world, or roughly equivalent to the stock market value of Google and Amazon combined.

At that price, the IPO is the largest ever, though only 1.5 percent of Aramco is being sold. That portion is valued at $25.6 billion, more than the previous IPO record holder, the Chinese e-commerce group Alibaba, in 2014.

The IPO may even be increased to meet unsatisfied investor demand. Aramco has the option to issue a further 450 million shares under the terms of a “purchase option” agreed with the investment banks advising on the deal. The final size could be as much as $29.4 billion.

Two-thirds of the IPO has been taken up by institutions, and the rest by private investors in Saudi Arabia and other GCC states. It was 465 percent oversubscribed.

Aramco marketed the IPO only in the Arabian Gulf following a decision not to make “road show” trips to big Western financial centers. Advisers were confident there was sufficient demand in the Middle East, but the Saudi government has the option to sell further shares in the future to foreign investors or on a foreign stock exchange.

One Middle East financier for an Asian institution said: “So far so good for the Saudis. There may be some foreign and sovereign investors named in the next few days, which will be interesting.”

Trading in the shares will take place after legal and procedural requirements are completed on Dec. 12.


Singapore Airlines drops ‘flights to nowhere’ after outcry

Updated 29 September 2020

Singapore Airlines drops ‘flights to nowhere’ after outcry

  • Several carriers have been offering short flights that start and end at the same airport to raise cash

SINGAPORE: Singapore Airlines said Tuesday it had scrapped plans for “flights to nowhere” aimed at boosting its coronavirus-hit finances after an outcry over the environmental impact.
With the aviation industry in deep crisis, several carriers – including in Australia, Japan and Taiwan – have been offering short flights that start and end at the same airport to raise cash.
They are designed for travel-starved people keen to fly at a time of virus-related restrictions, and have proved surprisingly popular.
But Singapore’s flag carrier – which has grounded nearly all its planes and cut thousands of jobs – said it had ditched the idea following a review.
The carrier has come up with alternative ideas to raise revenue, including offering customers tours of aircraft and offering them the chance to dine inside an Airbus A380, the world’s biggest commercial airliner.
Environmental activists had voiced opposition to Singapore Airlines launching “flights to nowhere,” with group SG Climate Rally saying they would encourage “carbon-intensive travel for no good reason.”
“We believe air travel has always caused environmental harm, and it is now an opportune moment for us to think seriously about transitions instead of yearning to return to a destructive status quo.”
The airline said earlier this month it was cutting about 4,300 jobs, or 20 percent of its workforce, the latest carrier to make massive layoffs.
The International Air Transport Association estimates that airlines operating in the Asia-Pacific region stand to lose a combined $27.8 billion this year.
The group also forecasts that global air traffic is unlikely to return to pre-coronavirus levels until at least 2024.