State-owned Saudi Aramco starts trading on the Saudi Stock Exchange (Tadawul) today Dec. 11 with the symbol 2222, and a daily price fluctuation limit of 10%.
Aramco’s initial public offering (IPO) is considered Saudi Arabia’s and the world’s largest share sale ever.
Aramco has set the final IPO price at SAR 32 per share, valuing the company at SAR 6.4 trillion ($1.71 trillion).
That figure is 1.4x higher than the current market value of Apple, breaking the record of the world’s largest listed company, of $1.19 trillion.
The Saudi giant oil producer’s value is also higher than the combined value of the world’s top oil producers at $1 trillion (Shell ($225.5 billion), ExxonMobil ($228.3 billion), Total ($141.9 billion), BP ($126 billion) and Chevron ($221.5 billion).
Saudi Aramco offered 3 billion shares, or 1.5% of its capital, of which 1 billion shares were allocated for retail investors.
The share sale, which started from Nov. 17 to Dec. 4, raised SAR 446 billion and was 465% oversubscribed.
The world’s largest oil exporter also allocated up to 1,500 shares to every retail subscriber in its IPO, a full allocation ratio to 97.5% of total subscribers.
The remaining shares will be allotted pro-rata based at a ratio of 10.941%.
|
Aramco’s IPO Details |
|||||
|
IPO tranches |
Subscribers (mln) |
Funds raised (SAR bln) |
Subscription shares (bln shares) |
IPO allocated shares (bln shares) |
Coverage ratio (%) |
|
Retail |
5.06 |
49.19 |
1.54 |
1.00 |
153.7 % |
|
Corporate |
-- |
397.0 |
-- |
2.00 |
-- |
|
Total |
-- |
446.19 |
-- |
3.00 |
465% |
The following table illustrates the ownership structure after the IPO:
|
Aramco’s Stake Ownership Structure |
||
|
Number of shares (mln shares) |
Stake (%) |
|
|
Government |
196,882.8 |
98.44 % |
|
Public |
3,000.0 |
1.50 % |
|
Treasury stocks |
117.2 |
0.06 % |
|
Total |
200,000 |
100 % |
Aramco is the fifth company to list shares on Tadawul this year, following Ataa Educational Co. in July, Maharah Human Resources Co. in June, Arabian Centres Co. in May, and Al Moammar Information Systems Co. in April.
The new entry brings the number of listed firms in Tadawul to 182, along with 17 real estate investment trusts (REITs).
Tadawul will extend today the opening auction for Saudi Aramco’s stock only for 30 minutes to set the opening price.
Key highlights:
Saudi Arabian Oil Co. (Saudi Aramco) was established as a limited liability company by virtue of Royal Decree dated on Nov. 13, 1988. The company is wholly-owned by the Saudi government and has paid-in capital of SAR 60 billion, divided into 200 billion ordinary shares without par value.
The offering will not impact the company's capital or its total issued shares.
In 1993, the company assumed the assets and operations of Saudi Arabian Marketing and Refining Co. (Samarec), a government-owned in-Kingdom refining and international product marketing organization. Samarec had joint ventures with Shell (SASREF) and Mobil, which later became ExxonMobil.
Later on, the company entered into additional ventures with: Dow (Sadara); Lanxess
(ARLANXEO); Petronas (PRefChem); Sinopec (YASREF); Sumitomo (Petro Rabigh); Total (SATORP); Shell (Motiva); and Mobil (Luberef).
In May 2017, the company acquired full ownership of Motiva (formerly a joint venture with Shell) and ARLANXEO (formerly an associate in partnership with Lanxess) on December 31, 2018.
On Jan. 1, 2018, Saudi Aramco was converted into a joint stock company and was registered in the city of Dhahran.
Saudi Aramco operates mainly in all energy-related activities, including hydrocarbon and chemical industries, along with other related industries or any other business inside the Kingdom or abroad.
|
Company Profile |
|
|
Company |
Saudi Arabian Oil Co, (Saudi Aramco) |
|
Stock market |
TASI- Main Market |
|
Company’s core business |
All activity aspects related to the energy fields |
|
Company’s capital |
SAR 60 bln |
|
Total number of shares |
200 bln shares |
|
Nominal value |
No nominal value for Aramco’s shares |
|
IPO price |
SAR 32/share |
|
Market value |
SAR 6,400 bln |
|
Net profit for 9M 2019 |
SAR 255.81 bln |
|
Dividend distributed for Q3 2019 |
SAR 50.25 bln |
|
Dividend planned to be distributed for the period from the final allotment date for IPO shares until Dec. 31, 2019 |
SAR 14.63 bln |
|
Ban period |
The major shareholder (the seller shareholder) is subject to a 6-month ban period, starting from the date of starting trading of the shares offered in the market. The seller shareholder may not dispose of shares during this period. The company obtained a number of exemptions, including allowing the major selling shareholder to dispose of his shares other than the ban period according to the following obligations: |
The selling shareholder has granted the stabilizing manager, Goldman Sachs Saudi Arabia, a purchase option allowing it to cover short positions resulting from any over-allotments, pursuant to which the stabilizing manager may purchase from the selling shareholder up to a maximum of 450 million additional shares, representing 15% of the offering size at the final offer price.
The purchase option will be exercisable in whole or in part upon notice by the stabilizing manager, at any time on or before 30 calendar days after the commencement of trading of the shares on Tadawul.
The stabilizing manager may execute transactions to stabilize the market price of the shares to the extent permitted by the stabilization instructions. Such transactions may be effected on the exchange and may be undertaken at any time during the stabilizing period.
The stabilizing manager will disclose any allocation of over-allotments and price stabilization processes undertaken with regard to the offering to the extent required by the stabilization instructions.
In case the purchase option is exercised in full, the total offering size will be 3.45 billion shares, representing an offer amount of SAR 110.4 billion ($29.4 billion).
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