Published: Sun, November 17, 2019
Markets | By Otis Pena

Aramco Sets IPO Share Price Range Between SR30-32

Aramco Sets IPO Share Price Range Between SR30-32

This would bring anywhere between $24 billion and 25.6 billion into its coffers, depending on the final price that is to be announced on December 5.

Aramco is the world's most profitable company with a planned dividend of US$75 billion next year, more than five times larger than the payout by Apple, the biggest of any S&P 500 company.

That won't be the only record to fall if Aramco achieves the higher price: at that level, the share sale would raise just over $25 billion, making it slightly bigger than Alibaba's 2014 debut on the New York Stock Exchange, so far the world's biggest IPO.

Crown Prince Mohammed bin Salman first announced plans for a partial IPO in 2016.

The value of Saudi Arabia's state-owned oil giant has fallen below the $2tn target set by Crown Prince Mohammed bin Salman after a tepid response from worldwide investors to its stock market flotation.

But Aramco, a cash cow that catapulted the kingdom to become the Arab world's biggest economy, does appear to hold enormous appeal for local retail investors.

But the firm has said there are no current plans for an global stock sale, indicating that the long-discussed goal had been shelved for the time being.

There is an incentive mechanism in the IPO whereby Saudi investors will receive a bonus one-for-ten allocation of shares, up to a maximum of 100 shares, if they do not sell shares in the market for a period of six months after dealings begin in December, at a date still to be determined.

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That’s according to documents released on Sunday by the company.

The sources said Aramco will no longer rely on that rule, meaning it will not market the shares in the United States.

A man walks past a compound for Saudi Aramco in Jiddah, Saudi Arabia.

They are attracted by the potential fees and the possibility that Aramco will eventually expand the listing to an worldwide exchange like NY or London.

Aramco has hired a host of worldwide banking giants including Citibank, Credit Suisse and HSBC as financial advisers to assess interest in the share sale and set a price.

The sale of the company, first mooted four years ago, has been overshadowed by delays and criticism of corporate transparency at Saudi Arabia's crown jewel.

The Riyadh listing comes after initial hopes for a 5 per cent IPO on the domestic and global bourses were dashed past year amid debate over valuation and where to list Aramco.

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