(LiveMint)
Saudi Aramco raised $25.6 billion from the world’s biggest initial public offering, closing a deal that became synonymous with the kingdom’s controversial crown prince and his plans to reshape the oil-rich nation.The state-owned oil giant set the final price of its shares at 32 riyals ($8.53), valuing the world’s most profitable company at $1.7 trillion. It received total bids of $119 billion.
For Crown Prince Mohammed Bin Salman, the sale could help restore credibility undermined by setbacks to his blueprint to overhaul the economy and a global reputation tarnished by the murder of Washington Post columnist Jamal Khashoggi and the war in Yemen.But the deal ended up being very different from what the prince had envisaged when he first floated the idea in 2016 with an ambition to raise as much as $100 billion. Aramco offered just 1.5% of its shares and opted for a local listing after global investors balked at its hopes of valuing the company at $2 trillion.
Instead, Aramco relied heavily on local investors and funds from neighboring Gulf Arab monarchies. In the offering for individuals, almost 5 million people applied for shares. The institutional tranche closed on Wednesday and attracted bids totaling 397 billion riyals.The kingdom’s richest families, some of whom had members detained in Riyadh’s Ritz-Carlton hotel during a so-called corruption crackdown in 2017, are expected to have made significant contributions. Global banks working on the deal were sidelined after Saudi Arabia decided to focus on selling the shares to local and regional investors.
