Saudi Aramco announces intention to proceed with domestic IPO

Author: Nurluqman Suratman

2019/11/04

SINGAPORE (ICIS)--Saudi Aramco on Sunday announced its intention to proceed with its initial public offering (IPO) on the domestic bourse.

The oil and gas giant is expected to list 1% or 2% of the company on the Saudi stock exchange or Tadawul, which would make it the world's largest IPO in history at a potential valuation of $1.5tr according to analysts.

Saudi Aramco president and CEO Amin Nasser (left) and Aramco chairman Yasir al-Rumayyan at a press conference to announce the company's IPO - 03 November 2019. (Source: STRINGER/EPA-EFE/Shutterstock)

Saudi Arabia’s Capital Market Authority approved Aramco's application for the domestic listing on 3 November, state-owned Saudi Aramco said in a filing on the Saudi bourse, Tadawul.

“The government intends to sell a portion of its shares in Saudi Aramco,” the company said.

Specific details on the numbers of shares to be sold, pricing or the date for the launch of the IPO were not provided.

Saudi Aramco said that it will determine the IPO launch date after registering interest from investors.

According to media reports in late October, Saudi Aramco’s share price could be set on 17 November; with share subscription to start on 4 December; and with actual trading on Tadawul expected to begin on 11 December.

Saudi Aramco is expanding its downstream petrochemical business via a planned acquisition of a 20% stake in India’s Reliance Industries, after announcing in March a $69bn deal to acquire 70% of Saudi petrochemical giant SABIC.

"The company expects the proposed acquisition of SABIC to be transformative to its strategy in chemicals and expand its downstream capabilities in sales, marketing, engineering and technology," the company said in the Tadawul filing.

On 4 September, the company appointed Yasir Al-Rumayyan as its new chairman, replacing Khalid al-Falih, as Saudi Arabia named a new energy minister - Prince Adulaziz bin Salman.

Al-Rumayyan is also the head of Saudi Arabia's Public Investment Fund (PIF).

“Today marks a significant milestone in the history of the company and important progress towards delivering Saudi Vision 2030, the Kingdom’s blueprint for sustained economic diversification and growth," Al-Rumayyan said in the filing to Tadawul.

The IPO announcement also followed recent attacks on Saudi Aramco's facilities on 14 September this year which cut its crude supply by 5.7m barrels per day.

Its oil output was restored to target levels on 25 September.

The incident resulted in the interruption of feedstock supply at several petrochemical sites in Saudi Arabia.

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