Saudi Aramco’s prospectus details the world’s largest IPO
Saudi Aramco to offer up to 0.5% of its shares to individual investors in the world's largest IPO to commence on Nov. 17, Saudi Aramco's prospectus reported.
Saudi Aramco has announced the launch of offering its shares for the first time ever on the Saudi Stock Exchange (Tadawul). Saudi Aramco to offer one billion shares to private investors in world's biggest IPO, according to the prospectus.
According to the prospectus, book building for investinginstitutions will start on November 17 and end on December 4, and it will starton November 17 and end on November 28 for individual investors.
Aramco said it aims to sell a maximum of 0.5% of its shares toindividual investors in the IPO.
The company's shares amount to 200 billion shares with a capital ofSAR60bn, without the face value.
The final price of the offering and the allocation of the finalshares to institutions and individuals will be announced on December 5.
According to the company, the surplus, if any, will be refunded nolater than December 12, with the number of shares offered and the finalsubscription price to be determined after the period of the book building.
The prospectus included the sale of a number of shares worth SAR3.75bn,or $1billion, based on the final offering price to the company for use as partof the employee shares program.
Subscription limits forindividuals and institutions
The prospectus pointed out that there is no minimum or maximumnumber of shares that can be subscribed by institutions, while the minimumsubscription for individuals is 10 shares and there is no maximum.
The IPO targets two tranches — the first tranche is for the investinginstitution; this segment includes the categories that are entitled toparticipate in the process of book building in accordance with the instructionsof book building and shares allocating to IPOs issued by the Authority.
While the second tranche is for individual subscribers; thissegment includes natural Saudi individuals, including divorced Saudi women orwidows with minor children of a non-Saudi spouse, who are entitled to subscribein their own name or the names of their minor children to their own benefit,provided that they provide proof that they are divorced or widows and proof ofmaternity for minor children, and any non-Saudi resident or natural citizen ofthe GCC who have a bank account with one of the recipients.
The final offering price
The final offering price will be the price at which the offeringshares are allocated to all categories of subscribers.
Aramco said it would pay dividends to its shareholders in Saudiriyals, with the exception of the shareholder seller, i.e. the government, whichwill get its dues in US dollars.
The Offer Shares shall be entitled to their share of any dividendsannounced as of the date of the announcement of the final allocation of theOffer Shares to subscribed institutions and individual subscribers.
Every Saudi natural person, including a divorced or widowed Saudiwoman, who has Saudi minors (eligible individual subscribers) who subscribes inthe offering shares and maintains them for 180 days from the first commencementdate of trading in the stock market (free maturity) continuously anduninterruptedly (eligible Shares) obtains one share (bonus share) for every tensubscription shares allocated to it, provided that the number of bonus sharesgranted and eligible for each eligible subscriber shall not exceed a maximum of100 bonus shares.
The bonus shares will be granted and allocated by the sellershareholder of the shares it owns in the company. This grant does not entailthe transfer of the related rights to the eligible individual subscriber onlyfrom the date of transfer to the investment portfolio.
Aramco IPO prospectus
Aramco's prospectus marks an important milestone in deciding howmuch equity an individual should buy, which will be followed by severalimportant steps.
