The Saudi Arabian Oil Company, often called Saudi Aramco, broke the record for the biggest initial public offering in history when it raised US$25.6 billion today.
Saudi Aramco listed three billion shares at a price of US$8.53 each, which put it ahead of Alibaba, the Chinese e-commerce giant, which raised US$25 billion when it listed in September 2014.
The Saudi state-owned company sold roughly 1.5 per cent of its 200 billion shares in the IPO which ultimately values the company at US$1.7 trillion.
The success of the IPO is relative, however, it was primarily supported by local investors, and fell short of the Crown Prince Mohammed bin Salman’s projected valuation of US$2 trillion.
The listing is solely for Saudi Arabia’s stock exchange, the Tadawul, after plans for a grander launch were met with tepid international reception due to questions about the company’s corporate finance, low oil prices, climate concerns and geo-political risks.
In May, the company’s East-West pipeline was attacked by unmanned drones carrying explosives which resulted in it being put out of operation for some time. This was followed by two separate attacks at facilities in August and September, the latter of which resulted in Saudi Aramco’s crude oil production being cut by more than half.
The company said its production has returned to the same level prior to the September attack.