Aramco’s ‘greenshoe option’ pushes IPO to record USD29.4 billion

DUBAI, United Arab Emirates (AP) — Saudi Arabian oil giant Aramco announced yesterday that its initial public offering (IPO) raised a record USD29.4 billion, a figure higher than previously announced, after the company used a so-called “greenshoe option” to sell millions more shares to meet investor demand.

The company said that the sale of an additional 450 million shares took place during the IPO process.

The oil and gas company, which is majority owned by the state, began publicly trading on the local Saudi Tadawul exchange last December 11.

It hit upwards of USD10 a share on the second day of trading. This gave Aramco a market capitalisation of USD2 trillion, making it comfortably the world’s most valuable company.

Aramco’s additional sales mean the company has publicly floated 1.7 per cent of its shares.

A cameraman films Aramco’s oil processing facility after the recent September 14 attack in Abqaiq, near Dammam in the Kingdom’s Eastern Province last September 20. PHOTO: AP

It’s IPO, even before the added sales, was the world’s largest ever.

The shares sold in the over-allotment option “had been allocated to investors during the bookbuilding process and therefore, no additional shares are being offered into the market today,” Aramco said.

Company shares traded down yesterday, dipping to around SAR34.7, or USD9.25 a share, amid heightened tensions between Iran and the United States (US).

Aramco was a target of rising tensions over the summer when a missile and drone attack, which Saudi Arabia and the US blame on Iran, temporarily halved its production.

Yesterday’s trading figures value Aramco at USD1.85 trillion, still well ahead of Apple, the second largest company in the world after Aramco, but below the USD2 trillion mark sought by Crown Prince Mohammed bin Salman.