Saudi Arabia to offer 0.5% for public shares in Aramco

Andrew Cummings
November 10, 2019

The oil and gas company netted profits of $111 billion previous year, more than Apple, Royal Dutch Shell and Exxon Mobil combined.

Aramco's oil facilities were targeted on September 14 in unprecedented attacks that temporarily shut 5.7 million barrels per day (bpd) of output - more than 5% of global oil supply.

Saudi Arabia's condition-owned oil huge Aramco disclosed it is going to promote as much as.5% of its shares to particular traders, however in a prolonged doc launched late Saturday it didn't disclose how an excessive amount of the corporate will probably be floated when it goes public on the nation's home alternate.

Trading on Saudi Arabia's domestic exchange could begin as soon as December 11, according to state-linked media.

The valuation would be nearly twice that of Microsoft, now the world's most valuable listed company, and seven times that of Exxon Mobil, the biggest listed oil major by market capitalisation.


However, the exact number and percentage of the stock that the company will offer, as well as the final share price, will be determined at the end of that period, according to the document.

Why is Aramco selling shares?

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.

The IPO represents the cornerstone of powerful crown prince Mohammed bin Salman's "Vision 2030", aimed at leading the world's biggest crude exporter away from oil.

The prospectus said the state giant will sell up to 0.5 percent of its shares to individual investors while it has still not decided on the percentage for larger institutional investors. Brent crude shut Friday at all-around $62 a barrel.


It did, though, mention possible risks, including the government's control over oil output and terrorist attack.

Sources have said the company could sell 1%-2% on the Saudi stock market.

RESULTS AND CASHFLOW - The company noted that its results and cashflow are significantly impacted by worldwide crude oil supply and demand.

Among the risks highlighted in the prospectus were the potential for attacks and the potential for encountering antitrust legislation, as well as the right of the Saudi government to decide maximum crude output and direct Aramco to undertake projects outside its core business. Saudi Arabia formally began off its very long-anticipated first common public that includes of its state-operate oil massive Saudi Aramco on Sunday, which can see a sliver of the group made out there on a group inventory alternate in hopes of boosting billions of for the dominion.


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