RIYADH, Saudi Arabia – Saudi Arabia on Sunday put a value of up to $1.71 trillion on energy giant Aramco in what could be the world’s biggest initial public offering (IPO), but missed Crown Prince Mohammed bin Salman’s initial target of $2 trillion.
Aramco said it would sell 1.5 percent of the company in a blockbuster initial public offering worth at least $24 billion.
“The base offer size will be 1.5 percent of the company’s outstanding shares,” the state-owned energy giant said in a statement that set the price range at 30-32 Saudi riyals per share ($8-8.5).
The much-delayed offering is scaled down from original plans, but it still rivals the world’s biggest listing so far – the $25 billion float of Chinese retail giant Alibaba in 2014.
Aramco had initially been expected to sell a total of five percent on two exchanges, with a first listing of two percent on the kingdom’s Tadawul bourse, followed by a further three percent on an overseas exchange.
But the firm has said there are no current plans for an international stock sale, indicating that the long-discussed goal had been shelved for the time being.
Saudi Arabia is pulling out all the stops to ensure the success of the IPO, a cornerstone of de facto ruler Prince Mohammed’s ambitious plan to diversify the economy by pumping funds into megaprojects and non-energy industries.
S&P Global Ratings said the stock market debut could enable the kingdom to strengthen its financial position.
“If subsequently effectively deployed, the funds raised could be used to support longer-term economic growth in Saudi Arabia,” it said.(Agence France-Presse)