DHAHRAN, Saudi Arabia/DUBAI – Saudi Arabia’s giant state oil company finally kick-started its initial public offering (IPO) on Sunday, announcing its intention to float on the domestic bourse in what could be the world’s biggest listing as the kingdom seeks to diversify its economy away from oil.
But in its long-awaited announcement, Aramco, the world’s most profitable company, offered few specifics on the number of shares to be sold, pricing or the date for a launch.
Bankers have told the Saudi government that investors will likely value the company at around $1.5 trillion, below the $2 trillion valuation touted by Crown Prince Mohammed bin Salman when he first floated the idea of an IPO nearly four years ago.
Aramco also did not mention what measures it has taken to beef up security following unprecedented attacks on its oil plants in September.
Sources have said that the oil company could offer one to two percent 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.
“Today is the right opportunity for new investors to reap the benefits of Aramco’s ability to achieve value, and boost it on the long-term,” Aramco chairman Yasir al-Rumayyan told a news conference at the company’s headquarters in the eastern city of Dhahran.
The company will spend the next 10 days talking to investors and sounding out their interest and the price range will follow, he said.
The IPO is designed to turbocharge Prince Mohammed’s ambitious economic reform agenda by raising billions to build non-energy industries and diversify revenue streams.(Reuters)
