Published: Sun, November 10, 2019
Economy | By

Saudi Aramco IPO offering to launch Nov.17

Saudi Aramco IPO offering to launch Nov.17

The more than 600-page prospectus did not include details of how much of the company would be floated in total or of any commitments from anchor investors.

Sources have said the company could sell 1%-2% on the Saudi stock market.

The IPO process will begin on November 17 and close on December 4.

Offering for the shares will begin on November 17, the prospectus said.

The company said it will determine the percentage to be sold t o institutional investors after consultations with its financial advisors and global coordinators consisting of major worldwide banks.

"The targeted percentage of offer shares allocable to individual investors will be up to 0.5% of the shares", the prospectus said.

The IPO represents the cornerstone of powerful crown prince Mohammed bin Salman's "Vision 2030", aimed at leading the world's biggest crude exporter away from oil.

The hefty dividend is expected to attract both domestic and worldwide investors who place a premium on investments that generate steady income.

The oil and gas sector is half the country's gross domestic product and about 70 percent of its export earnings.

Other risks listed range from the fallout of climate change on the demand and price of oil to the potential disruption of Aramco oil production to terrorist attacks and other forms of armed conflict.

PRODUCTION - In 2018, Aramco produced 13.6 million barrels per day of oil equivalent including 10.3 million bpd of crude.

There are concerns about the extent to which the interests of new investors in the company will be protected, the NYT said.

The government will then have a lockup period of a year on further share sales after this initial period.

Aramco has hired a host of global banking giants including Citibank, Credit Suisse and HSBC as financial advisers to assess interest in the share sale and set a price.

Aramco has been in talks with Gulf and Asian sovereign wealth funds and wealthy Saudi individuals to secure top investors of the IPO, but no cornerstone investor is yet to formally agree to a deal.

Norway's sovereign wealth fund, the largest in the world, has said it does not plan to invest in Aramco, a Norwegian official told AFP.

Analysts from 16 banks have offered a valuation on the company, ranging in estimates from $1.1 trillion at the bottom right up to $2.5 trillion and the midpoint was $1.75 trillion. While some argue that the company's valuation may miss a $2 trillion valuation target, if Aramco reaches the figure, it will surpass the previous record-setting IPO reached by Chinese e-commerce giant Alibaba.

Bidding for shares in the world's most profitable company will start in one week, it has been announced.

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