The Strategist

Saudi Aramco brings placement volume to $ 29.4B

01/13/2020 - 11:12

Saudi state-owned company Saudi Aramco announced that it has fully implemented the option for an additional floatation of 450 million shares provided by the IPO’s conditions. The kingdom government will receive an additional $ 3.8 billion from this, and the total placement will reach a record $ 29.4 billion.

Jason Woodhead via flickr
Jason Woodhead via flickr
In December 2019, Saudi Aramco placed 3 billion shares on the Saudi Tadawul exchange, or 1.5% of the capital, excluding the option. The placement went along the upper limit of the price range - 32 riyals, or $ 8.53 per paper. Trading in stocks began on December 11. Based on the offering price, the company's capitalization amounted to $ 1.7 trillion. The Financial Times, citing sources, wrote that in order to achieve targets, authorities pressed local financial institutions and wealthy families, demanding that they buy shares in the secondary market.

The option for additional placement suggested an opportunity to sell another 450 million shares within 30 days from the start of trading. These securities were sold at a placement price (SAR 32 apiece), the company said.

Aramco quotes rose on the second day of trading in December, approaching 39 riyals per share, and capitalization exceeded $ 2 trillion. It was this mark that the Saudi authorities called the target when preparing Saudi Aramco’s IPO. At the beginning of the year, the company's shares were cheaper amid a situation worsening in the Middle East after the death of Iranian general Qassem Soleimani.