Bloomberg: Aramco Sees Nearly Enough Early Orders to Pull Off IPO

IPO banks indicate institutional portion almost covered, Bloomberg said.
IPO banks indicate institutional portion almost covered, Bloomberg said.
  • IPO banks indicateinstitutional portion almost covered, Bloomberg said.

SaudiAramco's bankers are seeing sufficient early demand to pull off the stateoil giant's IPO just three days after launching the deal, specialists said.

Thehigh turnout from Saudi family businesses is an incentive for individualinvestors to invest in the IPO, which runs until December 4.

  • Aramco IPO's bank offering fees willnot exceed $90mn, Bloomberg reported.

Investinginstitutional turnout is expected to boost individual investors' turnout.

The final offer price is scheduled to be set on December 5

In arelated development, Reuters said that more than 25 banks appointed by SaudiAramco as underwriters will charge low fees compared to the size of the offer, notmore than maximum of $90mn.

Bankswill charge 35 basis points of the funds received, Reuters said. This isequivalent to $90mn, if priced at the ceiling of the declared range, to raise $25.6bn.

Bycomparison, Alibaba raised $25bn from its public offering in New York, paying $300mnto 35 banks.

Aramcoannounced last Sunday to determine the IPO's price range and the beginning ofthe period of book building for the investing institutions and individual investors.

While,the official announcement of the offering price of the subscribed shares willbe on December 5, where the price range of the offering has been set between SAR30to SAR32 per share.

Thefinal offering price is expected to be set at the end of the order bookbuilding period. The individual investors segment will be priced at SAR32 pershare, the upper limit of the price range.

Wherethe final offering price is less than SAR32, individual subscribers, in respectof the difference between the upper limit of the price range and the finaloffering price, shall have the option of: (a) Obtaining the cash surplus byreimbursing the individual subscriber; or (b) The possibility of allocatingadditional shares to the individual subscriber.

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