Aramco's second share sale opens, to raise $13bn
RIYADH, June 2, 2024
Saudi oil giant Aramco has announced the sales of more than $10 billion worth of shares in its second public offering, involving 1.545 billion ordinary shares by the Saudi government.
This offering, representing 0.64% of Aramco’s issued shares, is set to raise up to $13.1 billion. The price range for the offer shares has been set between SAR26.7 and SAR29 per share.
The Saudi government currently holds 82.19% of the company’s issued shares. Upon closing of the Offering, the government will hold 81.55% of the issued shares if the over-allotment option is not exercised, or approximately 81.48% assuming the over-allotment Option is exercised in full.
For the share sale, the kingdom has added four more banks including Credit Suisse Saudi Arabia and BNP Paribas.as the advisers began taking orders on Sunday for the sale.
The Saudi government may sell up to a 0.7% stake in the world's top oil exporter.
The banks on the deal will take orders through Thursday and it will price the following day, with the shares expected to start trading next Sunday on Riyadh's Saudi Exchange.
For the purposes of allowing the sabilizing manager to cover short positions resulting from any over-allotments, the government has granted the stabilizing manager an option or greenshoe, pursuant to which the stabilizing manager may purchase from the Government up to 10% of the number of offer shares, at the final offer price.
M. Klein and Company and Moelis are independent financial advisers for the deal.
The share sale is the company’s second, after Aramco first entered public markets in 2019 and offered 1.5% of the company to investors. That sale raised a record $29.4 billion, history’s largest IPO to date. Aramco is the world’s largest oil company in terms of both daily crude production and market cap.
The Offering will be made to institutional investors in Saudi Arabia as well as those located outside the Kingdom of Saudi Arabia who are qualified in accordance with the Rules for Foreign Investment in Securities to invest in listed securities and eligible retail investors in the Kingdom of Saudi Arabia and other GCC countries.
Outside the Kingdom, the Offering will be made in compliance with Regulation S under the US Securities Act of 1933, as amended.
In relation to the Offering, Saudi Aramco intends to conduct a series of meetings with institutional investors starting from today (June 2) to June 6.
Citigroup Saudi Arabia, Goldman Sachs Saudi Arabia, HSBC Saudi Arabia, JP Morgan Saudi Arabia Company, Merrill Lynch Kingdom of Saudi Arabia, Morgan Stanley Saudi Arabia and SNB Capital Company are acting as joint global coordinators and joint bookrunners for the Offering.
According to Aramco, Al Rajhi Capital, Credit Suisse Saudi Arabia, part of UBS Group, EFG Hermes KSA, Riyad Capital and Saudi Fransi Capital are acting as domestic joint bookrunners (Joint Global Coordinators).
BNP Paribas, BOCI Asia Limited and China International Capital Corporation Hong Kong Securities Limited are acting as foreign joint bookrunners (residing outside of the Kingdom) for the Offering (together with the Joint Global Coordinators and the Domestic Bookrunners).
SNB Capital Company is acting as the Lead Manager of the Offering. Alinma Bank, Al Rajhi Banking and Investment Corporation, Arab National Bank, Banque Saudi Fransi, Riyad Bank, Saudi Awwal Bank and The Saudi National Bank are acting as the receiving entities for the Offering. Merrill Lynch Kingdom of Saudi Arabia is acting as the stabilizing manager for the Offering.
The deal kicks off as the Opec+ group of oil producers is set to meet on Sunday to determine output policy, with some ministers meeting in Riyadh, according to Opec+ sources.
The de facto Saudi-led Organization of the Petroleum Exporting Countries and allies led by Russia, together known as Opec+, is currently cutting output by a total of 5.86 million barrels per day (mbpd), equal to about 5.7% of global demand.
The curbs include a 1 mbpd voluntary cut by Saudia Arabia. While the moves by Opec+ have helped support crude prices this year, Brent settled below $82 a barrel on Friday, down nearly $10 from a six-month high in April.-TradeArabia News Service
