DUBAI/RIYADH Reuters) - State-owned oil giant Saudi Aramco's initial public...
DUBAI/RIYADH Reuters) - State-owned oil giant Saudi Aramco’s initial public offering will be the biggest in history, but will still fall significantly short of the towering $2 trillion valuation long sought by Crown Prince Mohammed bin Salman.
Saudi Arabia relied on domestic and regional investors to sell a 1.5% stake after lukewarm interest from abroad, even at the reduced valuation of $1.7 trillion. Even at a $1.7 trillion valuation, international institutions baulked, prompting Aramco to scrap roadshows in New York and London and focus instead on marketing a 1.5% stake to Saudi investors and wealthy Gulf Arab allies. Saudi banks offered citizens cheap credit to bid for shares.The IPO is the culmination of a years-long effort to sell a portion of the world’s most profitable company and raise funds to help diversify the kingdom away from oil and create jobs for a growing population.
Despite the official push and offer of loans to fund share purchases, interest was relatively muted compared with other emerging market IPOs, including the listing of a top Saudi bank in 2014 which was oversubscribed many times over.Sources have said the Abu Dhabi Investment Authority and Kuwait Investment Authority , sovereign wealth funds of two of Saudi Arabia’s Gulf allies, planned to invest in the deal. ADIA declined to comment, while KIA did not respond to requests for comment.
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