PetroRabigh launches SR4.6 bln IPO

07-Jan-08

an initial public offering (IPO) to raise SR4.6 bln (US$1.23 bln). This is the first time that state-owned Aramco, the world's largest oil producing firm, has offered shares in one of its affiliates to the public. Sumitomo Chemicals and Aramco will each retain a 37.5% after the IPO. PetroRabigh- a US$10 bln joint venture between Saudi Aramco and Japan's Sumitomo Chemicals, will sell 219 million shares, representing 25% of its capital, to Saudi nationals at SR 21 each. The share price offers a 50% discount on the project's cost of US$10 bln. The valuation was based on government policy to have broader public participation. The issue is only open to Saudis. All Saudi banks will take subscriptions for the IPO from January 5-12. Institutional investors will get between 25-50% of the offered shares depending on appetite for the retail tranche. Up to 1.78 mln shares will be earmarked for employees. The minimum subscription is for 10 shares and the maximum is one million shares. The joint venture is expected to start commercial operations in Q4-08. The complex will annually produce 18.4 mln tons of oil products, 1.3 mln tons of ethylene and 900,000 tons of propylene.