Luberef IPO: Saudi Aramco’s unit may raise $1.32bn

RIYADH: Saudi Aramco Base Oil Company (Luberef), the refining unit of oil major Saudi Aramco, may raise as much as 4.95 billion riyals ($1.32 billion) from its initial public offering, as the world’s biggest crude producer seeks to list some of its subsidiaries. Luberef will sell more than 50 million shares, or about 29.7 per cent of the company’s issued share capital, and set the offering share price between 91 and 99 riyals per share, it said in a statement on Sunday.

The final offer price will be determined through a book-building process and is expected to be announced on December 11, it said. The subscription period for individual investors will begin after the determination of the final price and the offering period will be for five days, starting on December 14 until December 18. A maximum of 12.5 million shares, or 25 per cent of the total share offering, will be allocated to individual investors. Luberef is selling existing shares owned by private equity company Jadwa Investment. It will list on the main market of Saudi Arabia’s Tadawul stock exchange.

Saudi Aramco owns 70 per cent of Luberef and Jadwa owns the remaining 30 per cent, which it acquired in 2007 from Exxon Mobil. Aramco will not sell any of its shares in the offering and will continue to own 70 per cent of Luberef’s share capital after the offering. No date has been set yet for shares to begin trading on the Tadawul exchange.

Luberef’s IPO plans come amid a bumper year for company listings in the Gulf and Mena, despite declines in global markets, with Saudi Arabia and the UAE making up the majority of new listings amid high oil prices. Middle East IPOs have raised more than $19 billion this year, the highest share for the Gulf region after 2019, when Saudi Aramco went public in a $29 billion offering, the world’s largest.

Last month, Americana, the largest quick-service restaurant operator in the Mena region, raised $1.8 billion from its IPO, paving the way for its listing on Saudi Arabia’s Tadawul and the UAE’s Abu Dhabi Securities Exchange, the Arab world’s two largest stock markets. Americana is Saudi Arabia’s largest IPO this year and the first company to be dually listed in the kingdom and the UAE.