Saudi Aramco targets sale of 0.5% of state oil giant to retail investors, sources say

Saudi Aramco targets sale of 0.5% of state oil giant to retail investors, sources say


Saudi Aramco is looking to sell up to 0.5 per cent of the state oil giant to retail investors in its planned initial public offering (IPO), three sources familiar with the matter told Reuters.

The Saudi oil group has not yet revealed the size of its planned IPO or what proportion of the company it will float, although sources have previously said this could be one to two per cent.

Aramco declined to comment.

It is expected to release more details about the company in an IPO prospectus document later on Saturday.

Assuming Aramco achieves a total valuation of $2 trillion US, the retail tranche could be worth around $10 billion US, the sources said on Saturday.

Aramco fired the starting gun on the domestic IPO last week after a series of false starts. It did not give details on how much would be sold, or when the listing would happen, while expert valuations vary from $1.2 to $2.3 trillion US.

A man reads Aramco’s Twitter page at a coffee shop in Jeddah, Saudi Arabia, on Nov. 3. (Amr Nabil/The Associated Press)

A government committee has met in the past few months with dozens of wealthy Saudi individuals to secure pre-sale agreements, sources told Reuters last month.

And the government has encouraged investors to repatriate cash held overseas to buy into the IPO to avoid draining too much liquidity from the Saudi banking system, they said.

Reuters reported last month that Aramco can take advantage of new market rules that allow issuers the flexibility to sell more shares to retail investors, likely exceeding the usual 10 per cent seen in recent IPOs.

“Local demand is strong,” a second source said on Saturday, adding that this would lead institutional investors to think that up to 75 per cent of the IPO would be available for them.

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