Saudi Aramco IPO: Oil Giant Announces Intention to List Shares on Domestic course, Prospectus Issue on Nov 9


Saudi Arabian Oil Company or Aramco on Sunday announced its intention to list its shares on Riyadh stock exchange in what could be the world’s biggest initial public offering (IPO).

The world’s most profitable company’s shares are expected to begin trading in December (2019).

The valuation of Aramco will be decided upon during the investor roadshow and book-building for the IPO, Bloomberg reported chairman Yasir Al-Rumayyan as saying at a news conference at Aramco’s headquarters in the Dhahran, Saudi Arabia.

“I think this is the right time for us,” he stated. Rumayyan also added that the decision regarding the percentage of international investors as compared to the local ones is yet to be taken.”If we consider an international listing, it will be in the future,” he articulated.

The oil giant will also issue the IPO prospectus on November 9, said CEO Amin Nasser said at the conference.

Aramco, which pumps about 10% of the world’s crude oil emerged as the world’s most profitable company in 2018. Saudi Aramco beat American behemoths including Apple Inc. and Exxon Mobil Corp in terms of earnings.

The company generated earnings before interest, tax and depreciation of $224 billion last year, Fitch said, which is remarkably above the $82 billion of Apple or the $40 billion of Exxon Mobil. The credit rating agency awarded Aramco A-plus ratings ahead of its debut in the international bond market.

Earlier this year, Aramco raised $12 billion in its first international bond, gaining more than $100 billion in demand, in a deal that many saw as a pre-IPO relationship-building exercise with international investors.

According to a Reuters report, the IPO launch was delayed in October on hopes that pending third-quarter results will bolster investor confidence in Saudi Aramco. The oil giant wants to reassure investors of its solid financial performance after a September 14 attack on its Abqaiq and Khurais plants temporarily knocked out half its crude output.

The attack initially knocked out 5.7 million barrels per day (BPD) of production or more than 5% of global oil supply.

Crown Prince Mohammed bin Salman first announced plans for a partial IPO in 2016. The world’s most profitable company plans to list in Saudi Arabia and on an international exchange.

Aramco halted plans for a blockbuster international listing of around 5% last year amid debate over where to list overseas, but talks resumed this summer.

Salman in 2016 insisted that the world’s largest oil producer was worth $2 trillion but at a meeting to clear the way for the IPO, bankers made it clear that international investors had little appetite to buy at $2 trillion valuation.


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