Voice of America
17 Nov 2019, 22:05 GMT+10
DUBAI, UNITED ARAB EMIRATES - Saudi Arabia's state-owned oil giant Aramco announced Sunday it will sell a 1.5% stake in the company as it looks to raise as much as $25.6 billion from the sale.
The newly released figures also revealed a valuation for the company that's between $1.6 trillion and $1.7 trillion, a figure that fell short of the $2 trillion mark Crown Prince Mohammed bin Salman had sought.
Still, a 1.5% flotation could raise between $24 billion and $25.6 billion to help fuel the Saudi economy. Saudi Aramco announced it will have 200 billion regular shares, selling 1.5% or what is 3 billion shares.
Aramco set a stock price range of 30 to 32 Saudi riyals, or $8 to $8.50 a share for investors.
The company is selling 0.5% to individual investors, which will include Saudi citizens, residents of Saudi Arabia and Gulf Arab nationals, and 1% to institutional investors, which could include major Chinese and Russian buyers.
Aramco will announce the final price for the stock when the book-building period ends Dec. 5. Trading on the local Tadawul exchange in Riyadh is expected to happen sometime in mid-December.
Global buzz
The highly anticipated sale of a sliver of the company has been generating global buzz because it could clock in as the world's biggest initial public offering, surpassing record holder Alibaba whose IPO raised $21.8 billion on its first day of trading in 2014.
Saudi Aramco is the kingdom's oil and gas producer, pumping more than 10 million barrels of crude oil a day, or about 10% of global demand. The oil and gas company netted profits of $111 billion last year, more than Apple, Royal Dutch Shell and Exxon Mobil combined.
The kingdom's plan to sell part of the company is part of a wider economic overhaul aimed at raising new streams of revenue for the oil-dependent country, particularly as oil prices struggle to reach the $75 to $80 price range per barrel analysts say is needed to balance Saudi Arabia's budget. Brent crude is trading at just more than $63 a barrel.
Prince Mohammed has said listing Aramco is one way for the kingdom to raise capital for the country's sovereign wealth fund, which would then use that revenue to develop new cities and lucrative projects across Saudi Arabia.
Risks for investors
Despite Aramco's profitability, the state's control of the company carries a number of risks for investors.
Two key Aramco processing sites were targeted by rockets and missiles in September, an attack claimed by Iran-backed Houthi rebels in neighboring Yemen but which Saudi Arabia blamed on Iran. The government also stipulates oil production levels, which directly impacts Aramco's output.
Get a daily dose of Northern Ireland News news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Northern Ireland News.
More InformationWASHINGTON - Leading House Democrats unveiled two articles of impeachment against U.S. President Donald Trump on Tuesday, accusing him of ...
WASHINGTON - Growing tensions between Turkey and the United States do not have to result in the end of the ...
WASHINGTON - The United States on Tuesday stiffened sanctions against Myanmar's army chief over the mass killings of Rohingya, as ...
Austrian author Peter Handke faced protests and boycotts over his backing of late Serbian strongman Slobodan Milosevic, as he received ...
Naple - Poland striker Arkadiusz Milik scored a hat-trick to send Napoli into the Champions League last 16 on Tuesday ...
Salzburg - Liverpool struck twice in two minutes through Naby Keita and Mohamed Salah to avoid an embarrassing early Champions ...
WASHINGTON - Leading House Democrats unveiled two articles of impeachment against U.S. President Donald Trump on Tuesday, accusing him of ...
SANTIAGO, Chile - There has been no sign of the Chilean Air Force C130 Hercules aircraft which went missing on ...
BELFAST, Northern Ireland - Rory McIlroy is the latest top golfer to give Saudi Arabia a wide berth, despite being ...
WASHINGTON, DC - The FBI had little evidence to launch the investigation into the Trump presidential campaign, according to U.S. ...
GENEVA, Switzerland - In the wake of recent protests in Iran, the top United Nations human rights official expressed alarm ...
DELHI, India - Dozens of people have died in a fire in a large factory in Delhi.Fire engines streamed through ...