Saudi nationals eligible to receive one bonus share per 10 shares they hold for 180 days

November 03, 2019

Saudi Arabia's state oil company kicked off its initial public offering (IPO) on Sunday by announcing its intention to float on the Riyadh bourse.

Here some highlights from the document:


• Aramco said the final offer price, number of shares to be sold and percentage will be determined at the end of the book-building period.

• It will be offered to institutional and individual investors.

• Saudi nationals will be eligible to receive one bonus share per 10 shares they hold for 180 days, up to a maximum 100 bonus shares.

• Saudi Arabia's CMA market authority has agreed to exempt non-resident institutional foreign investors that intend to subscribe from certain formalities to achieve qualified foreign investor status.


• The board intends to declare aggregate ordinary cash dividends of at least $75 billion in 2020.

• The government will forgo a quarterly dividend between 2020-2024 if needed in order to allow Aramco to pay a minimum cash dividend to other shareholders.


• Aramco and the sovereign Public Investment Fund (PIF) agreed to amend payment terms so that 36% of the purchase price will be paid in cash and 64% will be paid as a seller loan on or before Sept. 30, 2020.

• Saudi Aramco will pay a $500 million loan charge to the PIF on the closing date and five additional promissory notes in an aggregate principal amount of $2.5 billion will be issued.


• The document mentioned a May 2019 armed drone attack on Aramco's East-West pipeline, which briefly shut it down.

• It said five drones attacked the Shaybah NGL facility on Aug. 17 resulting in fires and damage costing around $28 million. Restoration of plant operations on one NGL train was completed within two weeks after the attack and other repairs are ongoing, it said, adding revenue losses would not be material.

• The attack on Aramco's Abqaiq facility and Khurais processing facility on Sept. 14 caused explosions, fires and significant damage to equipment at each facility. Aramco is working towards fully restoring full plant operations there and does not expect the attack to have a material impact on its business, financial condition or results of operations.


• The shares have not been registered under the United States Securities Act or the securities laws of any other jurisdiction other than Saudi Arabia.


• In total 27 banks will be working on the IPO marketing.

• Nine banks are overseeing the listing as joint global co-ordinators: Citigroup, Credit Suisse, Goldman Sachs, HSBC, JPMorgan, Merrill Lynch, Morgan Stanley, NCB Capital and Samba Capital & Investment Management Company.

• Five Saudi banks are working as domestic bookrunners, 11 as foreign bookrunners.

• Moelis, Lazard and Michael Klein are acting as special advisers.


• The tax rate for Aramco's downstream business will be reduced from the 50% to 85% multi-tiered structure of income tax rate for domestic oil and hydrocarbon production companies to the general corporate tax rate of 20% applicable to similar domestic downstream companies under Saudi's income tax law.

• This is on the condition that Aramco consolidates its downstream business under a separate, wholly-owned subsidiary before the end of 2024.

• The period for which Aramco will not have to pay royalties on condensate production was extended for an additional 10 years after the current five-year period ending on Jan. 1, 2023, and may be further extended for further 10-year periods subject to government approval. — Reuters

November 03, 2019
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