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Aramco IPO values company at USD1.7 trillion, is set to raise USD25.6 billion

December 06/2019

MOSCOW (MRC) -- Saudi Aramco's initial public offering (IPO) values the company at USD1.7 trillion and is set to raise USD25.6 billion, reported Chemweek with reference to Financial Times and Reuters reports on Thursday, quoting people familiar with the matter.

Aramco shares have been priced at 32 Saudi riyals (USD8.53) per share, at the top end of the previously announced SR30Ц32/share indicative price range. The IPO was heavily oversubscribed.

The price makes Aramco's the world's largest stock market flotation, exceeding Chinese e-commerce company Alibaba's USD25-billion share sale in the US in 2014. Aramco's USD1.7-trillion valuation is more than the combined market capitalization of the five biggest international oil companies, the reports say.

A 1.5% share of Aramco was sold in the IPO, with 0.5% to retail and 1% to institutional investors. The retail subscription period ended on 28 November and the institutional subscription period ended on 4 December. Investment authorities in Abu Dhabi and Kuwait invested USD1.5 billion and USD1.0 billion in the IPO, respectively, reports say.

Aramco shares will trade on Saudi Arabia's Tadawul stock exchange.

As MRC wrote previously, Saudi Aramco, which temporarily lost half of its oil production following the September 14 attacks on two key oil facilities, is running its local refineries at full capacity and is forging ahead with plans to start up new refineries. The company is also starting up a joint venture refinery in Malaysia next year. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas - the Malaysian national oil company - collectively known as PRefChem, was supposed to start this year.

The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene located in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. Jazan and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus. The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.

Saudi Aramco is an integrated oil and chemicals company, a global leader in hydrocarbon production, refining processes and distribution, as well as one of the largest global oil exporters. It manages proven reserves of crude oil and condensate estimated at 261.1bn barrels, and produces 9.54 million bbl daily. Headquartered in Dhahran, Saudi Arabia, the company employs over 61,000 staff in 77 countries.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, PP random copolymer, propylene, ethylene, petrochemistry, Petronas, PRefChem, Saudi Aramco, Malaysia, Russia, Saudi Arabia.
Category:General News
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