Saudi Aramco to buy $1bn of IPO shares as incentive to executives and employees

A worker is seen at Saudi Aramco's oil facility in Abqaiq, Saudi Arabia, on October 12, 2019. (REUTERS/Maxim Shemetov/File Photo)
Updated 17 November 2019

Saudi Aramco to buy $1bn of IPO shares as incentive to executives and employees

  • Aramco said it was also considering introducing an employee stock purchase plan once it becomes a public listed entity

DUBAI: Saudi Aramco will make available $1 billion of shares for employees under a plan to incentivize executives and other staff members alongside the initial public offering (IPO) due to take place next month.

The plan — which was disclosed in the IPO prospectus published late on Saturday night — will involve Aramco buying the shares from the government and making them available for employees under special terms.

Details are still being worked through, but the prospectus talked of a “celebratory grant plan,” implying that at least some of the shares would be given free to some of Aramco’s 73,000 employees.

Such share schemes are not uncommon in privatizations. 

Contributions

The Aramco plan is designed to “provide additional incentives to employees whose contributions are essential to the growth and success of the company, to attract and retain qualified individuals and to further align the interests of such employees with shareholders of the company,” the prospectus said.

The scheme will be in three parts: A long-term incentive plan for executives, a similar plan for management levels, and an incentive scheme for other eligible employees, in addition to the “celebratory grant.”

Aramco said it was also considering introducing an employee stock purchase plan once it becomes a public listed entity.

Publication of the offer prospectus is expected to stimulate interest among Saudi nationals, eligible expats and Gulf Cooperation Council (GCC) citizens for the IPO, expected to be the biggest share offering ever. Some 1 billion shares will be made available to private investors in the IPO, with as much as 2 percent being sold to global investors.

High net worth individuals interested in buying large chunks of shares may be included in the institutional offering if there is a lot of private investor demand.

The final proportion to be sold will be determined by the strength of global demand for the stock. There is also the possibility that the government could sell a big tranche of shares to a strategic foreign investor — like a big energy trade partner or a sovereign wealth fund.

The 658-page prospectus contains detailed financial and commercial information on Aramco and will be studied closely by investors interested in the shares.

 


Saudi Hajj Ministry announces insurance for pilgrims

Updated 14 min 56 sec ago

Saudi Hajj Ministry announces insurance for pilgrims

  • Announcement comes as part of the Vision 2030 reform plan
  • Insurance will cover emergency cases, accidents and repatriation of the remains of pilgrims who die in Saudi Arabia

JEDDAH: Saudi Arabia has announced insurance for pilgrims coming from outside the kingdom, as part of its Vision 2030 reform plan, according to state media.

Hajj and Umrah Minister, Mohammad Saleh bin Taher Benten signed an agreement with Tawuniya Chairman Sulaiman Al-Humaid at the Hajj and Umrah Ministry’s headquarters in Makkah on Wednesday.

Under the agreement, the ministry will provide health and other insurance services to pilgrims from the time they arrive in the Kingdom until they leave.

The insurance scheme comes as part of the Vision 2030 reform plan, which aims to enhance pilgrims’ experiences, said Minister Benten.

Tawuniya was tapped by the Hajj and Umrah Ministry in consultation with the Saudi Arabian Monetary Authority (SAMA) and the Health Insurance Council, he added.

The insurance will be linked to the visa as soon as the pilgrim arrives in Saudi Arabia, he said. There will be a hotline, and pilgrims will be served by teams who speak multiple languages.

Ayman Al-Arfaj, general supervisor of the ministry’s media center, said the insurance will cost SR189 per person, which will be paid to the insurance company and will cover 30 days, the total stay of a pilgrim in Saudi Arabia.

He said that insurance will be unified for all pilgrims and will cover emergency cases, accidents and repatriation of the remains of pilgrims who die in Saudi Arabia. A pilgrim automatically gets insurance once the visa is issued.

Pilgrims in need of health assistance can avail themselves of the insurance benefit by presenting their passports at any hospital or clinic under the Saudi Ministry of Health or any private hospital and clinic accredited by the Health Insurance Council, Al-Arfaj said.

Abdulaziz bin Hadsan Al-Bouq, CEO of Tawuniya, which has been awarded the contract for four years, said the Kingdom is developing innovative methods to provide health services and reduce accidents at holy sites.

This project, he added, is supported by the Ministry of Hajj and Umrah and each insurance covers an amount of SR100,000 ($26,665) per person.

Al-Arfaj noted that since the start of the Umrah season in October, a total of 1,518,649 pilgrims have arrived in the Kingdom.