Aramco's banks will charge $ 90 million, according to Reuters reports

RIYADH (Reuters) - The army of banks working to list Saudi Aramco will collectively charge $ 90 million or less after the oil giant cut a deal that was initially seen as a golden opportunity for a huge cash operation, sources familiar with the matter said.

Aramco's 25 banks' fees have dwindled, despite years of huge delayed listing.

The sources said the banks would charge 35 basis points of the funds received, which is equivalent to about $ 90 million if the company priced the deal at the ceiling of the pricing range to raise $ 25.6 billion.

The world's most profitable offering portfolio contrasts with other large listings in recent years.

For example, China's Alibaba paid an estimated $ 300 million to the banks it co-listed in New York in 2014, raising $ 25 billion.

Facebook also paid $ 176 million to about 30 banks that were involved in its IPO in 2012, a deal that raised $ 16 billion.

Saudi Arabia initially estimated the value of its state company at $ 2 trillion, but the figure was reduced to a maximum of $ 1.7 trillion.

If the bankers had succeeded in certain things, including helping Aramco achieve the $ 2 trillion target and selling 2% of its shares - now impossible - the banks would have received 50 basis points, the sources said. This means fees that could exceed $ 200 million.

Cancellations
Aramco decided on Sunday to offer only 1.5% of its shares, downsizing a forecast of 2%. The company also canceled promotional events in developed markets such as the United States and Britain, turning its back on most international investments.

While Aramco has always been expected to pay lower fees, the sheer size of the shares offered for sale and the expectations for a large participation of international investors meant that banks expected a much higher return.

A source said Aramco had given banks 76 hours to confirm whether they would continue the process.

Another source said some banks were still trying to attract investment from Western funds in the deal, adding that Aramco was unlikely to give up any bank at this advanced stage unless the bank itself withdrew.

Bankers expected to spend a large part of this week with Aramco management in meetings with investors, where a presentation was expected on Wednesday at the Savoy Hotel in London and on Thursday in St. Regis in New York, according to invitations seen by Reuters. But all marketing events outside the Middle East were canceled on Saturday.

Another source said foreign funds do not tend to value Saudi firms as high as domestic investors, in part because they are concerned about regional risks.

Such risks surfaced when Aramco's oil facilities were attacked in September, halting production for some time.