One of the biggest oil manufacturing company, Saudi Aramco, revealed that it will sell up to 0.5 per cent of its shares to individual investors. The company, however, did not disclose how much of the Saudi owned oil major will be floated when it goes public on the country’s domestic exchange.
Saudi Aramco is the most profitable company globally, producing more than 10 million barrels of crude oil a day, or some 10% of global demand.
Still, the highly-anticipated sale of even just a sliver of the company is expected to make this the world’s biggest initial public offering.
Despite questions over Aramco’s valuation and how much of the company will ultimately be for sale on Saudi Arabia’s Tadawul stock exchange, the company’s size and profitability has made it undeniably attractive to potential investors. Trading could begin as soon as December 11, according to state-linked media.
The oil and gas company had profits of $111 billion last year, more than Apple, Royal Dutch Shell and Exxon Mobil combined.
In a roughly 650-page preliminary prospectus, Aramco said the offering period for investors will begin November 17. It will close for individual investors on November 28 and for institutional investors on December 4. Aramco will price its shares on Dec. 5, according to the document.
The company stated its plans to pay out an annual dividend of at least $75 billion starting in 2020, but questions linger over how much Aramco is worth.
Crown Prince Mohammed bin Salman has said the company is worth some $2 trillion, but analysts estimate the value is closer to $1.5 trillion.
The kingdom’s plan to sell a small percentage of the company is part of an ambitious economic overhaul spearheaded by the crown prince to raise 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 closed Friday at around $62 a barrel.
(With AP inputs)