Saudi Energy Giant Aramco Ready For Two-Stage Market Launch

Abu Dhabi (AFP) Saudi energy giant Aramco is ready for a two-stage IPO but the timing is up to the government, its chief executive said Tuesday, flagging a possible foreign listing as part of the offering.

Saudi state oil company Aramco's CEO Amin Nasser speaks during the 24th World Energy Congress (WEC) in the UAE capital Abu Dhabi on September 10, 2019. - Saudi energy giant Aramco is ready for a two-stage IPO but the timing is up to the government, Nasser said today, flagging a …
King Salman sons Prince Abdulaziz bin Salman

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Aramco is “ready” for the giant stock market debut but the timing is a “government decision”, Amin Nasser told reporters on the sidelines of the World Energy Congress. “One of the primary listings is going to be local but we are also ready for listing outside.” Nasser’s remark came after the Wall Street Journal reported last week that Aramco was considering a domestic debut and a subsequent international listing – possibly in Tokyo. Aramco has said it plans to float around five percent of the state-owned company in 2020 or 2021 in what could potentially be the world’s biggest stock sale. It aims to raise up to $100 billion based on a $2 trillion valuation of the company, but investors have long debated whether Aramco is really worth that much.

Saudi Aramco gives nine banks top roles on world’s biggest IPO: sources

The kingdom plans to list 1% of the state oil giant – the world’s largest oil company – on the Riyadh stock exchange before the end of this year and another 1% in 2020, sources told Reuters this week, as initial steps ahead of a public sale of around 5% of Aramco.

Aramco has selected JPMorgan Chase & Co (JPM.N), Morgan Stanley (MS.N) and Saudi Arabia’s National Commercial Bank (1180.SE), which were previously working on the share sale before it was paused last year, the sources said, declining to be identified due to commercial sensitivities. It has also chosen Bank of America Merrill Lynch (BAC.N), Goldman Sachs Group Inc (GS.N), Credit Suisse Group AG (CSGN.S), Citigroup Inc (C.N), HSBC Holdings PLC (HSBA.L) and Saudi Arabia’s Samba Financial Group (1090.SE), they added. To secure the lead role on the IPO, JPMorgan’s efforts were led by senior bankers in New York, London and Saudi Arabia who had long-standing relationships in Saudi Arabia, rather than Chief Executive Jamie Dimon, according to a person familiar with the matter. Aramco, JPMorgan, Bank of America, Citi, Credit Suisse, Goldman Sachs and HSBC declined to comment. The remaining banks did not immediately respond to requests for comment The IPO plan has rapidly gained momentum in recent days with the appointment of the head of the kingdom’s PIF sovereign wealth fund, Yasser al-Rumayyan, as Aramco’s new chairman. Rumayyan, a close ally of Prince Mohammed, took over from former energy minister Khalid al-Falih in a move to separate Aramco from the ministry, a step Saudi officials have said was important to pave the way for the IPO. Bankers have been courting Saudi Arabia to secure roles in the transaction, which has faced repeated delays, but which officials have said will happen by 2020-2021. Aramco’s chief executive, Amin Nasser, said this week that the domestic IPO would be the “primary” listing but that the company was also ready for an international share sale. He said the final decision on venue and timing rested with the government. Based on the indicated $2 trillion valuation that Saudi Aramco had hoped to achieve, a 1% float would be worth $20 billion, a huge milestone for the local stock market.