By Iain Fraser - Consultant Editor
Filed via European Press Centre Malaga
RIYADH Shares in Saudi Aramco surged to the maximum permitted 10% above their initial public offering (IPO) price on their Riyadh stock market debut closing in on the "ideal" $2 trillion (€1.8tn) price tag set by Saudi Crown Prince Mohammed bin Salman.
"Reports of my death are greatly exaggerated!" - Mark Twain
Last week the oil giant, which produces more than a tenth of global crude supply, raised $25.6bn (€23.09bn) as part of a plan by Saudi Arabia's royal family in privatising assets to move the kingdom away from its reliance on oil. The money raised from the sales will be used for non-energy investments.
That easily makes it the world's most valuable listed company but still less than the €1.8tn ($2tn) sought by Crown Prince Mohammed bin Salman however it is still the biggest share sale to date, surpassing that of China's Alibaba which raised $25bn (€22.5bn) in 2014 in New York.
The floatation comes at the end of a testing journey for Aramco's public offering with Saudi Arabia having to rely on domestic and regional investors to sell the 1.5% stake after lukewarm interest from abroad. It initially sought to raise $100bn (€90bn) on two exchanges - with listings on the Saudi Stock Exchange, the Tadawul and an overseas market.
The plan was scaled back after foreign investors raised concerns about climate change, political risk, and a lack of corporate transparency. International institutions were also unconvinced by the firm's valuation, prompting Aramco to pull marketing events in New York and London.
Instead, it focused its efforts on Saudi Arabian investors and wealthy Gulf Arab allies. Saudi banks also offered citizens cheap credit to buy the shares following a nationwide advertising campaign.
The kingdom urgently needs tens of billions of dollars to fund its so called "megaprojects" and develop new industries.
About Saudi Aramco
Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia. It is one of the largest companies in the world by revenue, and according to accounts seen by Bloomberg News, the most profitable company in the world.
