RIYADH/DUBAI Reuters - State-owned oil giant Saudi Aramco's initial public ...
) as the world’s most valuable listed firm. But the listing, expected later this month on the Riyadh stock exchange, is a far cry from the blockbuster debut originally envisaged by the Crown Prince.
Saudi Arabia relied on domestic and regional investors to sell a 1.5% stake after lukewarm interest from abroad, even at the reduced valuation of $1.7 trillion. Aramco’s advisors said they may partly or fully exercise a 15% “greenshoe” option, allowing it to increase the size of the deal to a maximum of $29.4 billion.
Even at a $1.7 trillion valuation, international institutions baulked, prompting Aramco to scrap roadshows in New York and London and focus instead on marketing a 1.5% stake to Saudi investors and wealthy Gulf Arab allies. Saudi banks offered citizens cheap credit to bid for shares.The IPO is the culmination of a years-long effort to sell a portion of the world’s most profitable company and raise funds to help diversify the kingdom away from oil and create jobs for a growing population.
The government promoted the investment as a patriotic duty, particularly after Aramco’s oil facilities were attacked in September, temporarily halving the kingdom’s oil output. Aramco has planned a dividend of $75 billion for 2020, more than five times larger than Apple’s payout, which is already among the biggest of any S&P 500 company.
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