(Bloomberg): Aramco’s offering attracts requests from Asian and Western funds

Bloomberg reported that the secondary offering of Saudi Aramco attracted strong demand from foreign investors, noting that foreign demand came mostly from Asian and Western funds.

According to the agency, the offering attracted significant interest from foreign investors, according to the people who declined to reveal their identity because the information is private. It was not immediately clear exactly how much demand came from abroad, but these investors placed enough bids to cover the entire supply.

It is noteworthy that Saudi Aramco announced last Sunday a secondary public offering of 1.545 billion shares of stock by the government, which represents about 0.64% of the company’s issued shares, indicating that the price range for the offering shares is expected to be between 26.7 riyals and 29.0 riyals per share.

The company added that according to the subscription book management agreement and the coordination agreement, the government and the company are prohibited from selling the company’s shares and the company is prohibited from issuing new shares in the company for a period of six months from the date of completion of the offering, which is expected to fall on Tuesday, June 11, except within certain exceptions or in the event of International Coordinators waive this requirement (as defined below).

It explained that subscribing institutions in the Kingdom of Saudi Arabia and subscribing institutions located outside the Kingdom that are eligible in accordance with the rules regulating foreign investment in listed securities are entitled to subscribe to the offering shares, in addition to qualified individual subscribers in the Kingdom and other Gulf Cooperation Council countries. The offering will be conducted outside the Kingdom in accordance with Regulation S under the US Securities Act of 1933, as amended (“US Securities Act”).

Also, 154.5 million offering shares, representing 10% of the number of offering shares (excluding shares issued under purchase option shares) will be allocated to individual subscribers – provided that there is sufficient demand from individual subscribers. An announcement will be issued if there is a change or update to the terms and conditions of the offering, including the number of offering shares. However, there will be no amendment to the number of offering shares allocated to individual subscribers.

The government will receive the full net proceeds from the offering and will compensate the company for all offering expenses. Accordingly, the company will not receive any proceeds from the offering, and the offering will not result in any reduction in the percentage of shares owned by other shareholders in the company.