Saudi Aramco raises $25.6bn in world's biggest share sale

Marco Green
December 10, 2019

That gives the company a total valuation of $1.7 trillion.

Aramco said in a statement that the IPO will consist of 3 billion shares, or 1.5% of the company, offered for 32 riyals (between $8.00 and $8.53).

The state-owned crude oil company had announced in November that it would be putting shares up for sale.

Saudi Aramco oil tanks sit at a facility in Abqaiq, Saudi Arabia, on October 12, 2019.

The share sale is at the heart of Crown Prince Mohammed bin Salman's ambitions to wean the Saudi economy off its dependence on oil.

While Aramco earned $25.59 billion from its IPO, it broke the previous record held by Chinese e-commerce giant Alibaba's offering on the New York Stock Exchange in 2014 when $21.8 billion was raised in a single day.

Saudi Arabia is predicting that its budget deficit will balloon to US$50 billion next year as low oil prices and lowered production eat into the Kingdom's oil revenue, according an official budget released Monday by the Saudi Arabian government.

It had initially sought to raise $100bn on two exchanges - with a first listing on the kingdom's Tadawul bourse, and then another on an overseas exchange such as the London Stock Exchange.

The anticipated 2020 budget deficit would be up $15 billion on 2019 and will come even as Saudi Arabia plans to cut spending next year by 7.8%, to $272 billion.

However, it remains to be seen whether the share prices rises or falls when trading begins.

The IPO also carries political risk as the Saudi government, which relies on Aramco for the bulk of its revenues, controls the company. Oil-producing companies met on Thursday for a conference in Vienna where they discussed reducing production to drive up global fuel and energy prices.

Other reports by Click Lancashire

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