The Saudi government will face a year-long restriction on selling additional shares of Saudi Aramco following its IPO, according to media reports.
Citing three sources familiar with the matter, Reuters reported that the government is looking to list 2% of the company on the Saudi bourse, instead of the entire share capital.
Normally public companies list the entire share capital on the exchange and have a portion of that as free float.
I will get my money back and more. It’s Aramco"
Aramco announced a domestic IPO on Sunday. In a statement, the firm said that Aramco and the selling shareholder will be subject to restrictions on the sale, disposition or issuance of additional shares.
No lockup period was provided. Crown prince Mohammed bin Salman is seeking to raise billions of dollars to diversify the Saudi economy away from oil by investing in non-energy industries.
The company's roadshows will begin on November 18, with pricing scheduled for December 5 and shares expected to start trading on December 11, Reuters sources said.
In the meantime, from tapping lenders to selling personal assets, Saudis are scrambling to raise cash to invest in Aramco stocks, the world's most profitable company.
"We knew it was a matter of time, so all the talk in the office was everybody save up, have some cash ready to go," Nosaibah Alrajhi, 30, who founded and runs a financial services company told Bloomberg. "I have some cash ready."
"Some (Saudis) have started to sell other stocks in preparation to buy Aramco (shares)," said Ibrahim Ahmed, a Saudi energy industry analyst who is also considering investing his savings.
"People look at it as a sound investment. (But) I'm aware that it is a long-term investment that is good to have in a portfolio and not some kind of lottery ticket."
The government has reportedly pressed wealthy Saudi business families and institutions to invest in the IPO, and many nationalists have labelled it a patriotic duty. Saudi Arabia has sought to ease lending restrictions for ordinary citizens to buy a stake in the company, a strategy deemed risky by observers.
Eid al-Shamri, chief executive of investment bank Ithraa Capital, said some Saudis were considering selling their homes or borrowing money to purchase shares."This is definitely a serious event that will be recorded in the history of Saudi Arabia," Shamri told Bloomberg.
"This is the biggest IPO that will happen in Saudi history," said Alrajhi. "I will get my money back and more. It's Aramco. It's the biggest player in the international market. I want to be part of it."