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    Saudi Arabia poised to price Aramco shares at lower end of range to raise $11.2 bln


Saudi Arabia is poised to price shares in the offering of its state oil giant Aramco at 27.25 Riyals ($7.27) a piece, people familiar with the matter told Reuters on Friday.

by: Reuters

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Saudi Arabia poised to price Aramco shares at lower end of range to raise $11.2 bln

 - Saudi Arabia is poised to raise more than $11.2 billion from its secondary offering of oil giant Aramco's shares, after pricing them towards the lower end of a price range at 27.25 riyals ($7.27), people familiar with the matter told Reuters on Friday.

Aramco's book was covered four to five times near the bottom of the price range of 26.7 to 29 riyals, one of the people said.


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The pricing is a nearly 4% discount to where Aramco's shares closed on Thursday and gives Aramco a valuation of about $1.76 trillion. Its market capitalisation, according to its Thursday share price, was about $1.83 trillion.

The Saudi government is selling a roughly 0.64% stake in Aramco in a landmark deal that could help fund Crown Prince Mohammed bin Salman's plan to diversify the economy.

The offering could then be boosted to 0.7% of the oil giant in a so-called greenshoe option, which allows bankers to use shares to stabilise the price of the offering.

If that option is exercised, Aramco would raise roughly $12.36 billion. The world's top oil exporter exercised a greenshoe option after its 2019 initial public offering (IPO) to raise $29.4 billion, which remains the world's largest IPO.

The banks on the deal took orders through Thursday and shares are set to start trading next Sunday on Riyadh's Saudi Exchange.

The offering is codenamed Project Bond and has been in the works for months as a key step in drawing a broader range of investors after Aramco's record-breaking IPO, sources have said.

The deal will be a test of interest in Saudi markets after lukewarm demand from international investors for that IPO amid concerns about a high valuation, Saudi government control and the energy transition away from hydrocarbons.


($1 = 3.7504 riyals)


(Reporting by Maha El Dahan and Hadeel Al Sayegh; Writing by Yousef Saba and Nadine Awadalla; Editing by Michael Georgy and Christopher Cushing)