Saudi Aramco to pay banks US$64 mn for record IPO

Saudi Aramco is set to pay a combined US$64 million or 0.25% of the total deal value to the banks that arranged the world’s largest initial public offering (IPO).

Read: Saudi Aramco/Sabic re-evaluate US$20 bn crude-oil-to-chemicals project

The Gulf oil giant is reportedly planning to pay the top local banks on the deal, known as joint global coordinators that include Goldman Sachs, Morgan Stanley, and JP Morgan, US$10.4 million each.

Aramco raised US$25.6 billion in its share sale, which became a local affair after foreign fund managers shunned its premium valuation.

IPO banks globally earned average fees equal to 4.1% of the deal size this year, up from 3.6% last year, according to data compiled by Bloomberg.

The 16 local banks that worked with the oil company are reportedly to get a lesser amount of 13 million riyals or US$3.5 million. Local banks that acted as bookrunners will get about 5 million riyals, while foreign bookrunners are to get 2 million riyals each, according to a Bloomberg report.

The company has not commented on the issue.