This week, the subscription period for the Saudi oil company Saudi Aramco begins. The most valuable company in the world could also make the biggest IPO worldwide.
Vienna. It took about three years since the first announcement, but last weekend the Saudi state-owned oil giant Saudi Aramco finally released the prospectus for its upcoming IPO. It is still not disclosed how many shares Riyadh finally wants to throw on the market and what price the Saudi royal family presents itself as the current sole owner of the Group. Nevertheless, the 658 pages now announced details indicate that it could be the largest IPO in history so far.
So the subscription period for the shares of the company begins this week – on Sunday, November 17. This is already the first day of the upcoming working week in Saudi Arabia. As a result, institutional investors will have until December 4 to submit their bids. For small shareholders, however, a shorter period until 28 November applies.
Riyadh is targeting small shareholders
And the latter are also openly addressed by Saudi Aramco as a desirable investor – so should reserve up to 0.5 percent of the total shares for small shareholders, it says in the prospectus. However, many potential shareholders from the West may be scared that initially only an initial public offering in the Saudi capital Riyadh is planned and no second listing on a Western stock exchange.
However, the reservation of 0.5 per cent of the retail investment shares also indicates that Saudi Arabia will eventually sell two per cent of Saudi Aramco if demand is high enough. According to insiders, Riad varies between one and two percent. If really two percent of the shares are sold, then the IPO should also surpass the previous record of the Chinese online retailer Alibaba from 2014. At that time, the company or its owners earned $ 25 billion. Saudi Aramco is estimated at $ 1.5 to $ 2 trillion. A sale of two percent would thus flush up to $ 40 billion in the treasury of the Saudis.
The price of oil decides
How much Saudi Aramco is valued in total, should be answered only at the beginning of trading. The company recently told investors that it depends on the current oil price. At $ 45 per barrel ($ 159 each) $ 1.5 trillion would be $ 1.65 trillion at $ 65 a barrel and $ 2.1 trillion at $ 75 a barrel. The company would be twice as worth as the current global leader in market capitalization Microsoft. Most recently, the price of oil was just under $ 63 a barrel.
Most of the money in the IPO should come from institutional investors – and not only from the West. On the one hand, Riyadh on the one hand hunted funds from the Arab world but also sovereign wealth funds from China and Russia. Beijing is said to have already pledged an investment of ten billion dollars. However, no investor has yet declared it open. (SPF / ag.)
("Die Presse", print edition, 11.11.2019)