Saudi Aramco upsizes its record-shattering IPO by $3.8 billion

FILE PHOTO: Amin H. Nasser, President and CEO of Aramco, attends the official ceremony marking the debut of Saudi Aramco's initial public offering (IPO) on the Riyadh's stock market, in Riyadh

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FILE PHOTO: Amin H. Nasser, President and CEO of Aramco, attends the official ceremony marking the debut of Saudi Aramco’s initial public offering (IPO) on the Riyadh’s stock market, in Riyadh
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Reuters
  • Saudi Aramco took in an additional $3.8 billion through its record-breaking IPO by selling more shares to investors, according to a Sunday statement.
  • The oil firm set aside 450 million shares for investors as it gauged pre-IPO demand, and advising firm Goldman Sachs managed the shares for Aramco’s first month of public trading.
  • Goldman released proceeds for the over-allotment, also known as a greenshoe, over the weekend, bringing the total funds raised by Aramco’s IPO to $29.4 billion from $25.6 billion.
  • Watch Saudi Aramco trade live here.

Saudi Aramco took in an additional $3.8 billion through its record-breaking initial public offering by selling more shares to eager investors, according to a company statement.

The Saudi Arabian oil firm raised $25.6 billion through the world’s biggest IPO in early December, selling 3 billion shares at 32 riyals ($8.53) each. Aramco set aside another 450 million shares for investors as it gauged pre-IPO demand, and advising bank Goldman Sachs held the shares during Aramco’s first month of public trading.

Goldman released proceeds from the over-allotment to the Saudi Arabian government over the weekend, the statement said. The transfer brought the total funds raised through Aramco’s IPO to $29.4 billion.

The over-allotment’s proceeds were contingent on Aramco’s stock staying above its offer price. The additional shares, also known as a greenshoe, were set aside for 30 days after Aramco’s December 11 IPO in case the government sought to buy back stock and lift the share price. Aramco shares hit a low of 34.70 riyals ($9.25) January 8, and have since recovered to trade close to 35 riyals ($9.33).

The Saudi government plans to use the IPO proceeds to diversify its economy away from oil and boost domestic spending. Crown Prince Mohammad bin Salman appointed the head of Saudi Arabia’s sovereign-wealth fund, Yasir al-Rumayyan, to lead the Aramco IPO. Rumayyan plans to use the listing’s proceeds to invest in domestic non-oil companies and insulate the kingdom’s economy from oil-price volatility, according to The Wall Street Journal.

Aramco stock initially spiked after its IPO to reach the Crown Prince’s sought-after $2 trillion valuation. Aramco shares have since faced new pressures from heightened tensions in the Gulf region. The US’s assassination of top Iranian general Qassem Soleimani raised concerns of escalation between the two countries.

Fears of conflict have since faded following Iranian missile strikes on Iraqi bases housing US forces and a statement from President Trump that the US wouldn’t retaliate. Aramco’s market cap now stands at about $1.86 trillion.

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