Biggest share sale in history on track with Saudi Aramco’s $1.7tn IPO
1.5 percent of energy giant’s 200 billion shares earmarked for issue on Tadawul
Saudi Arabia is on track to stage the biggest share sale in history after Saudi Aramco, the most profitable company in the world, announced the terms of its long-awaited initial public offering (IPO).
With a price range for shares set between SR30 ($8) and a maximum SR32, and 1.5 percent of Aramco’s 200 billion shares earmarked for the issue on the 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. An announcement by the company on Sunday rang the bell for the process of “bookbuilding” — matching supply and demand for the shares within the price range. For private investors, that will end on Nov. 28. For big investing institutions in the Kingdom and the rest of the world, it will end on Dec. 4.
The final price will be set on Dec. 5, with the first day of trading likely coming in the following week. If all goes to plan, Aramco will have private shareholders for the first time in nearly four decades, since the last shares were bought back from their American owners.