Saudi Aramco Sets Eyes On 2-Part Listing For Faster IPO Processing

Saudi Aramco CEO, Amin Nasser
Amin H. Nasser, president and CEO of Saudi Arabian Oil Company, Saudi Aramco, is seen at the 24th World Energy Congress (WEC) in Abu Dhabi, United Arab Emirates September 10, 2019. (Photo: REUTERS/Satish Kumar)

Saudi Aramco is reportedly planning a listing that will be divided into two parts: the first will be a 1 percent offer this year, while the second will be filed in 2020 with the same percentage.

Advisers familiar with the matter told the Wall Street Journal that the main purpose of the said two-part filing is to expedite the IPO process. The second part of the listing is expected to take place in Tadawul.

The upcoming IPO is expected to be the largest yet in the history of Saudi Arabia and if all goes well, it could overtake Alibaba with the largest IPO in the entire world.

A number of countries have been reported to attract Saudi Aramco into filing with them. Asia's Hong Kong and Tokyo have reportedly been trying to woo officials in the kingdom, while Europe's London and the New York state of the U.S. have also been doing so.

On Tuesday, chief executive Amin Nasser said the kingdom's new energy minister, Prince Abdulaziz bin Salman noted that the world's largest oil company is prepared for the listing as long as shareholders also make the final decision for the date of the filing, Haaretz reported.

Over the past years, Saudi Arabia has been planning to have an international IPO and while initial plans for the listing are set somewhere between 2020 and 2021, a final list of banks for backup and with shareholders' approval, the industry experts are leaning on a late 2019 announcement.

The Saudi Aramco IPO is part of Crown Prince Mohammed bin Salman's plans to diversify the kingdom's economy. He also said that he is hoping for the oil behemoth to receive a valuation of $2 trillion.

Some of the banks that Aramco reportedly has its eyes on are Citi, Morgan Stanley, Goldman Sachs, Samba Financial Bank, National Commercial Bank, HSBC, and JP Morgan, sources revealed.

Last year, HSBC, JPMorgan, and Morgan Stanley were chosen for lead roles in the supposed IPO listing. However, plans were halted and this time around, industry experts believe the same banks will be tapped for major roles.

According to Reuters, banking specialists and industry analysts said Saudi Aramco may be valued at $1.5 trillion instead of the bigger amount the kingdom's Crown Prince was expecting.

Just this year, Aramco already raised $12 billion for its first international bond, making it more attractive for investors.

Financial experts said the timing is just right for the IPO as technologies come in the way of oil-producing companies. Further delays could reduce the overall valuation of what could be the world's biggest company.

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