Saudi Aramco, the world's largest oil-producing company, has set the final price of its secondary public offering at 27.25 Saudi riyals ($7.27) a share, pricing it at the lower end of the target range in a move that will allow it to raise $11.2 billion.
The offering comprising more than 1.54 billion shares represents about 0.64 per cent of the company’s issued shares, Aramco said on Friday in a statement after the book-building process.
The retail tranche will be 10 per cent, with a minimum of 10 shares each, while institutional investors will account for the rest on a pro-rata basis.
The retail offering was fully subscribed and managed to receive more than 1.33 million subscribers. Listing and commencement of trading in shares is expected to start on June 9, the company said.
Last week, Saudi Arabia announced plans to sell shares in Aramco, which said the offer had “the potential to increase the number of unique shareholders and more liquidity”, as well as increase its ranking in global indexes.
“We believe Aramco represents an attractive proposition to investors. We have delivered on our commitments since the IPO [initial public offering], we are investing in unique, value-added growth opportunities, and we continue to maintain our focus on profitability, resilience and sustainability,” the state oil company said.
Aramco completed the world’s largest IPO in late 2019, raising $25.6 billion and later selling more shares to take the total to $29.4 billion.
The company's net profit dropped by 14.4 per cent to $27.3 billion in the first three months of this year.
The Saudi government is the majority shareholder in Aramco and relies heavily on the company for the diversification of the kingdom's economy.
As part of its Vision 2030 programme, launched in 2016, Saudi Arabia is investing heavily in non-oil sectors such as technology and tourism to diversify its economy away from oil and support the growth of the private sector.
The share price announced on Friday values the company at about $1.76 trillion.
Citigroup, Goldman Sachs, HSBC, JP Morgan, Merrill Lynch, Morgan Stanley and SNB Capital are acting as joint global co-ordinators and joint bookrunners while Al Rajhi Capital, Credit Suisse, EFG Hermes, Riyad Capital and Saudi Fransi Capital are the domestic joint bookrunners.
Aramco's shares closed at 28.30 riyals on Thursday, down from 33.05 riyals at the start of the year, giving it a market capitalisation of about $1.83 trillion.
Oil prices fell in early trading on Friday. Brent, the benchmark for two thirds of the world’s oil, was down 0.19 per cent at $79.72 a barrel at 1.35pm UAE time.
West Texas Intermediate, the gauge that tracks US crude, was trading 0.24 per cent lower at $75.37 a barrel.
