Saudi Aramco To Launch Secondary Public Offering Of Company’s Ordinary Shares On June 2, 2024

The Saudi Arabian Oil Company (Aramco) announced on Thursday its plan to launch a secondary public offering of ordinary shares on Sunday. This offering includes 1.545 billion shares, representing approximately 0.64% of the company’s issued shares. The price range for these shares is expected to be between SAR 26.7 and SAR 29 per share.

The government has granted the stabilising manager an option, known as the "greenshoe option," to cover short positions resulting from any over-allotments. This option allows the stabilising manager to purchase up to 10% of the offer shares from the government at the final offer price. The over-allotment option will be exercisable within 30 calendar days after the commencement of trading on the Saudi Exchange (Tadawul), expected to begin on Sunday.

Assuming full exercise of the over-allotment option, the offering will comprise approximately 0.7% of Aramco’s issued shares. Both the government and Aramco will be restricted from disposing of any company shares for six months following the closing date of the offering, which is anticipated to be June 11.

The offering will target institutional investors in Saudi Arabia and qualified institutional investors outside the Kingdom, as well as eligible retail investors in Saudi Arabia and other GCC countries. The offering will comply with Regulation S under the US Securities Act of 1933. Meetings with participating parties are scheduled for June 2-6.

Provided there is sufficient demand, 154.5 million shares, representing 10% of the total number of offering shares, will be allocated to individual subscribers. Any changes or updates to the terms and conditions of the offering will be announced, ensuring that the number of shares allocated to individual subscribers remains unchanged.

M. Klein and Company and Moelis & Company UK LLP have been appointed as independent financial advisors for this offering. Citigroup Saudi Arabia, Goldman Sachs Saudi Arabia, HSBC Saudi Arabia, J.P. Morgan Saudi Arabia Company, Merrill Lynch Saudi Arabia, Merrill Lynch Kingdom of Saudi Arabia, Morgan Stanley Saudi Arabia, and SNB Capital Company have been appointed as coordinators and book-runners.

Local book-runners include Al-Rajhi Capital, Riyad Capital, and Capital Saudi Fransi. National Bank Capital Company (SNB) has been appointed as the lead manager for the offering. Additional banks involved include The First Saudi Bank (SAB), Alinma Bank, Arab National Bank (ANB), Saudi National Bank, Al-Rajhi Bank, Riyad Bank, and Banque Saudi Fransi.

Offering Timeline

The offering will commence before the opening of the Saudi financial market at 9:00 am on Sunday, June 2, 2024 (11/25/1445 H). The period for building the order book for subscribing institutions begins at 9:00 am (Riyadh time) on Sunday and ends at 5:00 pm (Riyadh time) on Thursday, June 6, 2024 (11/29/1445 H).

The subscription period for individual subscribers starts at 9:00 am (Riyadh time) on Monday, June 3, 2024 (11/26/1445 H) and ends at 5:00 pm (Riyadh time) on Wednesday, June 5, 2024 (11/28/1445 H). The final offering price and allocation of shares will be announced on Friday, June 7, 2024 (12/01/1445 H).

Post-Offering Procedures

The deadline for completing Negotiated Trades (NT) is before 9:00 am on Sunday, June 9, 2024 (12/03/1445 H). The deadline for depositing shares in individual subscribers' investment portfolios is also before 9:00 am on Sunday.

Subscribing investors are expected to start trading the offering shares in the Saudi financial market after implementing NT for subscribing institutions and depositing individual subscribers' shares in their investment portfolios on Sunday.

The last date for returning surplus subscription amounts or full subscription amounts to individual subscribers is Tuesday, June 11, 2024 (12/05/1445 H). The cash settlement and refund process will also be completed by this date.

The completion of the offering and total final offering value will be announced on Tuesday. The price stability period will run from Sunday until Tuesday, July 9, 2024 (01/03/1446 H).

With inputs from SPA