Saudi Aramco, the titan of the oil industry, has announced the closing price for its secondary share sale at 27.25 Saudi riyals per share, which is on the modest side of the anticipated range, enabling the company to accumulate $11.2 billion in capital.
The share offering, which encompasses over 1.54 billion shares or roughly 0.64% of Aramco’s total issued shares, was disclosed in a statement after the book-building phase was concluded.
With the retail portion set at 10%, requiring a minimum purchase of 10 shares, and the remainder allocated to institutional investors proportionately, the offering has attracted more than 1.33 million retail subscribers, reaching full subscription.
Share listing and trading commencement is slated for June 9, as confirmed by the company.
The recent plans to offload Aramco shares point towards a strategy to heighten the number of unique shareholders and enhance liquidity, thereby improving its standing in global indices.
The company emphasizes its appeal to investors, citing steadfast adherence to its commitments since its initial public offering, pursuit of distinctive growth initiatives, and sustained attention to profitability, resilience, and sustainability.
Aramco’s initial debut on the public market at the end of 2019 set records, garnering $25.6 billion and, with additional share sales, amassed a grand total of $29.4 billion.
However, the company witnessed a 14.4% dip in net profits, with figures falling to $27.3 billion in the first quarter of the year.
The Saudi government, as the predominant stakeholder in Aramco, relies on the oil giant as a key component in diversifying the national economy.
Under its ambitious Vision 2030 initiative, the kingdom is channeling investments into non-oil industries such as technology and tourism to reduce its dependency on oil and bolster private sector growth.
The established share price as of the announcement pegs Aramco’s valuation at around $1.76 trillion.
A consortium of financial titans including Citigroup, Goldman Sachs, HSBC, JP Morgan, Merrill Lynch, Morgan Stanley, and SNB Capital have taken the roles of joint global coordinators and bookrunners. On the local front, Al Rajhi Capital, Credit Suisse, EFG Hermes, Riyad Capital, and Saudi Fransi Capital are serving as domestic joint bookrunners.
Before the announcement, Aramco’s shares concluded trading at 28.30 riyals, a decline from the year’s start at 33.05 riyals, leading to a market capitalization of approximately $1.83 trillion.
In the backdrop of these developments, global oil prices have shown a slight downturn. Brent crude saw a 0.19% drop to $79.72 a barrel, while West Texas Intermediate fell by 0.24% to $75.37 a barrel.