Merrill Lynch Kingdom of Saudi Arabia, which acted as the stabilising manager for the Saudi Aramco share sale last month, said on Tuesday that it exercised the over-allotment, or greenshoe, option in respect of 154.5 million shares at the offer price of 27.25 riyals  ($7.27) apiece raising an additional $1 billion.

In a secondary public offering, Aramco had sold 1.54 billion ordinary shares, or 0.64% of its issued shares last month netting $11.2 billion. The government had allowed the stabilising manager to purchase up to 10% of the number of offer shares. With the option exercised in full, the offering will comprise approximately 0.70% of the company’s issued shares, Merrill Lynch Kingdom of Saudi Arabia, said in a statement on its website.

An over-allotment, or the greenshoe option, allows companies to issue more shares in public share sale when there is extra demand from investors.

Aramco raised $25.6 billion in the world’s largest IPO in late 2019, later sold  an additional 450 million shares in a greenshoe option to raise the total to $29.4 billion.

Last month, Aramco shares had climbed to SAR 28.35 in the first day of trading after the secondary share offering.

Aramco shares closed at SAR 28.15 on Riyadh's Tadawul bourse on Tuesday.

(Reporting by Brinda Darasha; editing by Seban Scaria)