Aramco to sell 1.54B shares in secondary offering

The book-building will run from June 2-6, while the retail offering will start on June 3 and end on June 5.

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The price range for the offer shares is expected to be between SAR 26.7 and SAR 29 per share.

If there are any updates or amendments to the terms and conditions applicable to the offering, including the number of offer shares, an announcement will be made.  However, no amendments will be made to the number of offer shares allocated to retail investors.

Saudi Aramco said for the purposes of allowing the stabilizing manager to cover short positions resulting from any over-allotments, the government granted the stabilizing manager an option (the over-allotment option) or “greenshoe”, pursuant to which the stabilizing manager may purchase from the government up to 10% of the number of offer shares, at the final offer price.

The over-allotment option will be exercisable in whole or in part upon notice by the stabilizing manager, within 30 calendar days after the commencement of trading of the offer shares on the Saudi Exchange (Tadawul), which is expected to be Sunday, June 9, 2024. Assuming the exercise of the over-allotment option in full, the offering will comprise approximately 0.7% of the company’s issued shares.

Pursuant to the bookrunners’ agreement and the coordination agreement, the government and the company will be restricted from disposing of the company’s shares. The company will also be restricted from issuing or disposing of new shares, in each case, for six months following the closing date of the offering, which is expected to be June 11, subject to certain exceptions and unless waived by the joint global coordinators.

The offering will be made to institutional investors in Saudi Arabia, institutional investors located outside the Kingdom who are qualified in accordance with the rules for foreign investment in securities to invest in listed securities. Eligible retail investors in the Kingdom and other GCC countries can also participate in the offering.

Outside the Kingdom, the offering will be made in compliance with Regulation S under the US Securities Act of 1933, as amended.

The company plans to hold meetings with participating parties on June 2-6.

Furthermore, the government will receive all of the net proceeds of the offering and will reimburse the company for all fees, costs and expenses it incurs in connection with the offering. Accordingly, the company will not receive any of the proceeds and the offering will not result in any dilution of the shares of the other shareholders of the company.

Saudi Aramco hired SNB Capital as the lead manager of the offering.

M. Klein and Company and Moelis & Company UK LLP were appointed as independent financial advisors.

Citigroup Saudi Arabia, Goldman Sachs Saudi Arabia, HSBC Saudi Arabia, J.P. Morgan Saudi Arabia, Merrill Lynch Kingdom of Saudi Arabia, Morgan Stanley Saudi Arabia and SNB Capital are acting as joint global coordinators and joint bookrunners.

Al Rajhi Capital, Riyad Capital and Saudi Fransi Capital are acting as domestic joint bookrunners (together with the joint global coordinators, the “bookrunners”).

Merrill Lynch Kingdom of Saudi Arabia is acting as the stabilizing manager.

Crown Prince Mohammed bin Salman announced transferring 8% of Saudi Aramco’s issued shares to wholly owned portfolios by the Public Investment Fund (PIF). Accordingly, the Saudi government’s ownership in Aramco will reach 82.186%, Argaam earlier reported.

In late 2019, Saudi Aramco offered 3 billion shares, of which 1 billion shares were allocated to retail investors, while the remaining 2 billion shares were allotted to institutional investors, at SAR 32 each. The offering was 465% covered.

The stock ended today 0.2% lower at SAR 29.

The oil giant's current capital stands at SAR 90 billion, with no nominal value. The number of shares reaches 242 billion.