Aramco’s ‘greenshoe option’ pushes IPO to $29.4 billion

1 / 2
A trader talks to others in front of a screen displaying Saudi stock market values in Riyadh. Sunday’s trading figures value Saudi Aramco at $1.85 trillion. (AP)
2 / 2
Above, market action during the second day of trading of Aramco shares at the Saudi stock market in Riyadh on December 12, 2019. Aramco initially raised a then-record $25.6 billion in its IPO in December by selling 3 billion shares at 32 riyals. (AFP)
Short Url
Updated 14 January 2020

Aramco’s ‘greenshoe option’ pushes IPO to $29.4 billion

  • Gulf stock marks extend gains from previous session as regional tension eases

DUBAI: Saudi Aramco announced on Sunday that its initial public offering raised a record $29.4 billion, a figure higher than previously announced, after the company used a so-called “greenshoe option” to sell millions more shares to meet investor demand.

The company said that the sale of an additional 450 million shares took place during the initial public offering process.
The oil and gas company began publicly trading on the local Saudi Tadawul exchange on Dec. 11.
It hit upwards of $10 a share on the second day of trading.
This gave Aramco a market capitalization of $2 trillion, making it comfortably the world’s most valuable company.

Additional sales
Saudi Aramco’s additional sales mean the company has publicly floated 1.7 percent of its shares. Its IPO, even before the added sales, was the world’s largest ever.
A greenshoe option, or over-allotment, allows companies to issue more shares in an IPO when there is greater demand from participants in the initial offer. Investors were allocated the additional shares during book-building, Aramco said.
The shares sold in the over-allotment option “had been allocated to investors during the book-building process and therefore, no additional shares are being offered in the market today,” Saudi Aramco said.

FASTFACT

A greenshoe option, or over-allotment, allows companies to issue more shares in an IPO when there is greater demand from participants in the initial offer.

Company shares traded at around around SR34.7, or $9.25 a share, on Sunday.
Sunday’s trading figures value Saudi Aramco at $1.85 trillion, still well ahead of Apple, the second largest company in the world after the oil giant.
All major Gulf stock markets opened higher on Sunday, extending their gains from the previous session.
Saudi Arabia’s index rose 0.7 percent, outperforming regional peers and buoyed by gains in financial and petrochemical shares. Al-Rajhi Bank and Banquet Saudi Francis were up 0.6 percent and 1.5 percent, respectively.
Advanced Petrochemical added 1.9 percent after reporting a 5.9 percent rise in estimated annual profit to SR759 million ($202 million).
Dubai’s index inched up 0.1 percent as blue-chip developer Emaar Properties gained 0.3 percent. Amanat Holdings rose 2.3 percent after the health care and education investment firm said it was assessing a possible acquisition of a stake in the Middle East operations of the VPS health care group.
Abu Dhabi’s index was also up 0.1 percent, with Emirates Telecom Group gaining 0.2 percent.
Kuwait’s and Oman’s stock markets will resume trading on Tuesday and Wednesday respectively.


Philippine jobless rate hits record 17.7% in April due to pandemic

Updated 05 June 2020

Philippine jobless rate hits record 17.7% in April due to pandemic

  • The Philippines is facing its biggest economic contraction in more than three decades
  • April’s 17.7 percent unemployment rate equivalent to 7.3 million people without jobs

MANILA: The Philippines’ unemployment rate surged to a record 17.7 percent in April, the statistics agency said on Friday, as millions lost their jobs due to a pandemic-induced lockdown that battered the economy.
The Philippines, which before the pandemic was one of Asia’s fastest growing economies, is facing its biggest contraction in more than three decades after the new coronavirus shuttered businesses and crushed domestic demand.
April’s unemployment rate, which is 7.3 million people without jobs, compares with 5.3 percent in January and 5.1 percent in April last year.
“We should not lose sight of the fact that this loss in employment is really temporary,” Economic Planning Undersecretary Rosemarie Edillon said in an online news conference.
The lockdown in the capital, Manila, which was one of the world’s longest and strictest, was relaxed as of June 1 to allow much-needed business activity to resume and soften the economic blow of the coronavirus, which has infected more than 20,000 in the country.