Aramco raises $25.6 B in biggest-ever IPO

Published December 6, 2019, 12:00 AM

by manilabulletin_admin

RIYADH (AFP) – Saudi Aramco on Thursday priced its long-awaited initial public offering (IPO) at the high end of the target range, raising $25.6 billion and giving the energy giant a valuation of $1.7 trillion in the world’s biggest stock sale.

Aramco priced its IPO at 32 riyals ($8.53) per share, surpassing the $25 billion raised by Chinese retail giant Alibaba when it debuted on Wall Street in 2014.

The sale of 1.5 percent of Aramco was oversubscribed 4.65 times, the energy giant said in a statement, but the scaled-down IPO is still a far cry from the blockbuster originally planned by Crown Prince Mohammed bin Salman.

The much-delayed stock sale, first announced in 2016, was initially expected to raise as much as $100 billion from the sale of up to five percent of the company.

The IPO is the bedrock of Prince Mohammed’s ambitious strategy to overhaul the oil-reliant economy by pumping funds into non-energy industries.

But sceptics say the IPO’s proceeds would barely cover the kingdom’s budget deficit for a year. The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club: Apple ($1.2 trillion), Microsoft and Alibaba ($1.1 trillion).

However, it fell short of the $2-trillion mark that de facto ruler Prince Mohammed was aiming for.