Luberef, subsidiary of Saudi Aramco, plans to raise as much as $1.32 billion

Saudi oil giant Aramco’s (2222.SE) Luberef base oil subsidiary said on Sunday it anticipates raising up to 4.95 billion riyals ($1.32 billion) from its initial public offering, if it prices at the summit of a range.

The statement said Luberef planned to sell 50.045 million shares, constituting nearly 30% of the firm’s issued share capital, at between 91 and 99 riyals each.

Despite a global dealmaking drought in the United States and Europe, where global banks have been scaling back headcount, state-led IPO programmes in Saudi Arabia, Abu Dhabi, and Dubai have helped equity capital markets in the oil-rich Gulf.

IPO proceeds from Europe, the Middle East, and Africa this year have totalled about $16 billion, according to Refinitiv data. Of that sum, half has been raised by Gulf issuers.

An institutional investors will be provided a minimum of 75% of Luberef shares, bookbuildings will start on Sunday and finish on Friday.

The final share price will be announced next Sunday, with individual investors able to subscribe from Dec. 14 to Dec. 18. Shares are not scheduled to begin trading on Riyadh’s Tadawul exchange just yet.

The Luberef consortium owns 70% of Luberef, and Saudi investment bank Jadwa Investment owns the remaining 30%.

The world’s largest IPO in late 2019, boosted to $29.4 billion in proceeds, was Saudi Aramco’s record listing.

Besides raising billions from pipeline-related deals, Aramco is also planning an IPO for its energy-trading firm.

The Vision 2030 economic agenda, which includes the kingdom’s privatisation programme, is a cornerstone of its economic agenda to wean the economy off oil, build new industries, and create jobs.

(3.7585 riyals = $1)