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Saudi Aramco Plans $25.6B Share Sale in Biggest IPOEver

Associated Press

   DUBAI, UNITED ARAB EMIRATES - Saudi Aramco,Saudi Arabia's state-owned
   oil company,on Thursday set a share price for itsinitial public stock
   offering--expected to be the biggest ever--that puts the value of the
   company at $1.7 trillion, more than Apple or Microsoft.
   The company said it wouldsell its shares at 32 riyals ($8.53) each,
   putting the overall value of the stake being sold at $25.6 billion.
   Aramco is floating a 1.5% stake in the company, or 3 billion shares.
   Trading is expected to happen on the Saudi Tadawul stock exchangeas
   early asDecember11.
   The company is selling 0.5% to individuals who are Saudicitizens and
   residents and 1% to institutional investors, which can be sovereign
   wealth funds, asset managersorgovernment-run pension programs.
   The pricing of the shareswas at the topof the rangeAramco had sought.
   The company had priced itsshares ranging from 30 to 32 riyals each,
   or$8 to$8.53 a share.
   In the announcement Thursday, Aramco said the offering drew heavy
   demand.

   Most orders from Saudis

   The company's financial advisers had said earlier that most
   orderscamefrom Saudi funds or companies, with foreign
   investors,including from neighboringPersianGulf Arab states,accounting
   for 10.5% of the bids. It was not immediately known what the final
   figures released Thursday representedand how much of that was generated
   by foreign investment.
   The highly anticipated sale of a sliver of the company hadgenerated
   global buzz since Crown Prince Mohammed bin Salman announced plans for
   it more than two years ago. That's in part because it would clock in as
   the world's biggest IPO, surpassing record holder Alibaba Group Holding
   Ltd., the Chinese conglomerate and e-commerce company, which raised
   about $25 billion in 2014.
   The kingdom's plan to sell part of the company is part of a wider
   economic overhaul aimed at raising new streams of revenue for the
   oil-dependent country.It came asoil priceshave struggledto reach the
   $75-$80-per-barrel range that analysts say is needed to balance Saudi
   Arabia's budget. Brent crude is trading at just over $63 a barrel.
   Prince Mohammed has said listing Aramco is one way for the kingdom to
   raise capital for the country's sovereign wealth fund, which would then
   use that money to develop new cities and lucrative projects across
   Saudi Arabia.
   Despite the mammoth figures involved in the IPO, they are not quite
   what the prince had envisioned based onhisremarks over the past two
   years. He'd previously talked about a valuation for Aramco of $2
   trillion and a flotation of 5% of the company involving a listing on a
   foreign stock exchange. There are no immediate plans for an
   international listing.

   Another sale?
   Aramco said Thursdaythatit would retain the option of an even bigger
   offering of a 3.45billion-share sale, representing $29.4 billion.
   Despite Aramco's profitability, the state's control of the company
   carries risks for investors. Two key Aramco processing sites were
   targeted by drones and missiles in September, an attack that was
   claimed by Iran-backed Houthi rebels in neighboring Yemen butthatthe
   U.S. blamed on Iran. Iran denies the allegation.
   The Saudi government also stipulates oil production levels, which
   directlyaffectsAramco's output.
   On Thursday, the countries that make up the OPEC oil-producing
   cartel,led by Saudi Arabia,were meeting in Vienna to decide whether to
   cutproduction and push up prices of fuel and energy around the world.

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