SAUDI ARABIA

Govt plans to sell 2% of Aramco in domestic listing

November 05, 2019
A sign of Saudi Aramco's initial public offering (IPO) is seen during a news conference by the state oil company at the Plaza Conference Center in Dhahran on November 3, 2019. (Reuters)
A sign of Saudi Aramco's initial public offering (IPO) is seen during a news conference by the state oil company at the Plaza Conference Center in Dhahran on November 3, 2019. (Reuters)

DUBAI/RIYADH — The Saudi government plans to sell 2% of state oil giant Aramco in a domestic listing on Dec. 11, three sources familiar with the matter said.

Final pricing for the IPO (initial public offering) is scheduled for Dec. 5 and the world's most profitable company is expected to start trading on the Riyadh bourse six days later, the sources said.

Aramco fired the starting gun on the domestic IPO on Sunday. However, it did not give details on how much of the company would be sold, or when the listing would happen, while expert valuations of the company vary wildly from around $1.2 to $2.3 trillion.

Sunday's announcement had said Aramco and the selling shareholder would be subject to restrictions on the sale, disposition or issuance of additional shares, but did not provide the lock-up period. Crown Prince Muhammad Bin Salman is seeking to raise billions of dollars to diversify the Saudi economy away from oil by investing in non-energy industries.

Aramco said the IPO timetable was delayed because it began a process to acquire a 70% stake in petrochemicals maker Saudi Basic Industries Corp.

Aramco roadshows for the Riyadh IPO will begin on Nov. 18, according to the sources.

Sources had told Reuters earlier the oil company could offer 1%-2% of its shares on the local bourse, raising as much as $20 billion to $40 billion.

A deal over $25 billion would top the record-breaking one of Chinese e-commerce giant Alibaba in 2014.

A $2 trillion valuation would be almost twice that of Microsoft, currently the world's most valuable listed company and seven times that of Exxon Mobil Corp, the biggest listed oil major by market cap.

The Saudi government is looking to list 2% of the company on the Saudi bourse though, rather than listing the entire share capital on the exchange, the sources said.

"Aramco would become the largest company by market cap in the MSCI EM index following listing but would account for only 0.5-0.6% of the index given an expected low index weighting," Bernstein analysts said in a note on Tuesday. — Reuters


November 05, 2019
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