Saudi Aramco’s $12 billion secondary share offering saw strong demand and sold out shortly after the offering opened on Sunday. Last Thursday, Saudi Arabia announced plans to sell 1.545 billion shares of Aramco, which could raise $12 billion.
Saudi Arabia will offer investors 0.64 percent of Aramco shares at SAR26.7 to SAR29 ($7.12-$7.73). However, banks managing the listing have a greenshoe option that they could use to raise the number of offered shares to around 1.7 billion shares or 0.7 percent of Aramco in case all the shares were sold. This could raise the offering’s value by over $1 billion to around $13.1 billion.
At the moment, Saudi Arabia’s government owns around 82 percent of Aramco, while the country’s Public Investment Fund holds 16 percent of the company.
Investment banks
The investment banks added to the Aramco offering since its announcement include Credit Suisse Saudi Arabia, BNP Paribas, Bank of China International, and China International Capital Corporation.
Before the announcement of the offering, Saudi National Bank’s investment banking arm, Citi, Goldman Sachs, HSBC, JPMorgan, Bank of America and Morgan Stanley were on the deal. In addition, Al Rajhi Capital, Riyad Capital, and Saudi Fransi were domestic joint bookrunners. Meanwhile, M. Klein and Company and Moelis are independent financial advisers for the deal.
Read: Saudi Arabia seeks to raise $12 billion from Aramco shares sale
OPEC+ extends output cuts
The offering kicked off on Sunday as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to extend their voluntary production cut of 2.2 million barrels of crude oil per day into 2025. OPEC+ is currently cutting output by a total of 5.86 million barrels per day (mbpd), equal to about 5.7 percent of global demand.
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