Aramco will sell the first tranche of shares in its long-awaited initial public offering at a price of 30-32 riyals, ($8-8.52), which would give the company a total value of some $1.7 trillion, Reuters reports, citing company sources.
The Aramco prospectus on the company’s website still has blanks in the per-share price range.
As per the Reuters report, however, Aramco said it plans to list 1.5 percent of its shares on the Tadawul exchange, which translates into 3 billion shares at a total value of $25.6 billion (96 billion riyals). These shares will only be available to Saudi investors and a small group of institutional investors from abroad that have permission to buy into the company.
The Saudi state oil company has been making strides in its preparation for going public after months of uncertainty and doubts whether it would list at all and if it does, which overseas exchange it will choose. Ultimately, however, the question of the overseas listing was put on hold, with Riyadh focusing on the local listing that has many wondering if the Tadawul would be strong enough to withstand it.
Earlier this month, at the release of its prospectus, Aramco said it planned to list just 0.5 percent of the shares in early December, in order to prevent a meltdown at the Tadawul. The ultimate target, however, is 5 percent of the company, which, Reuters notes, could be extended to as much as 15 percent under a greenshoe option.
Whether it would need to exercise this option remains doubtful. According to sources who spoke to Reuters, Aramco has no plans to market the listing internationally, even after it removed from its prospectus references to two U.S. acts that would have cut U.S. investors’ access to the IPO. The likely reason was investor indifference.
“It was not worth it from their view. If there’s no substantial value or demand why do it and take additional legal risk?” one banking industry source told Reuters.
By Irina Slav for Oilprice.com
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