Saudi Aramco Locks In Final Sale Price for Secondary Offering

Saudi Aramco, the world's leading oil producer by volume, disclosed the final price for its secondary public offering (SPO) on Friday. The final price per share was set at 27. 25 Saudi riyals ($7. 27), which falls within the lower range of the target price announced earlier. This offering, which represents 1. 545 billion shares, or 0. 64% of the company's total shares, is expected to generate roughly $11. 2 billion. There's also a potential "greenshoe" option that could increase the total proceeds to $12. 3 billion if exercised.

The announcement comes after a successful bookbuilding process that garnered significant interest from both retail and institutional investors. The retail portion of the offering, representing 10% of the total shares, was fully subscribed, with over 1. 33 million individual subscribers participating. The remaining shares were allocated proportionally among institutional investors.

This SPO is expected to broaden Aramco's shareholder base and enhance the company's liquidity. The increased liquidity could lead to a potential upgrade in Aramco's weighting on global stock market indices, making it more attractive to a wider range of investors.

The offering price reflects a calculated move by Aramco to balance its need to raise capital with ensuring affordability for investors. While the final price sits at the lower end of the proposed range, the strong demand during bookbuilding signifies continued investor confidence in Aramco's long-term prospects.

Aramco's decision to launch a SPO comes amidst a backdrop of high global oil prices fueled by the ongoing war in Ukraine and post-pandemic supply chain disruptions. The company is expected to leverage the capital raised from the offering to invest in its core operations while also exploring opportunities in the renewable energy sector, potentially accelerating its diversification efforts.

The successful completion of Aramco's SPO is a significant development for the Saudi Arabian government's economic diversification plans. The proceeds from the offering will likely be directed towards funding Vision 2030, a strategic framework aimed at reducing the kingdom's dependence on oil and transforming its economy. The Aramco SPO is also being seen as a benchmark for future IPOs in the region, with the potential to reignite investor interest in Saudi Arabia's capital markets.

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