Saudi Aramco heads for possible record-setting market debut

Dhahran, Saudi Arabia, Nov 4 (AFP/APP): Saudi Arabia on Sunday announced the stock market debut of energy giant Aramco, in what could be the world’s biggest IPO, underpinning Crown Prince Mohammed bin Salman’s ambitions to overhaul the kingdom’s oil-reliant economy.

After years of delay, Aramco said it plans to sell an unspecified number of shares on the Riyadh stock exchange, calling it a “historic” milestone for the world’s most profitable company which pumps 10 percent of the world’s oil.

However, the state firm did not set a date for the listing and said there were no current plans for an international stock sale, indicating that the long-discussed goal for a second offering on a foreign bourse had been put aside.

The launch, approved by regulators, forms the lynchpin of Prince Mohammed’s ambitious plans to steer the economy away from oil by pumping tens of billions of dollars into a host of megaprojects and non-energy industries.

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With analysts saying that Aramco could be valued at up to $1.7 trillion, the initial public offering (IPO) is potentially the world’s biggest, depending on how much of the company it decides to sell.

“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,” Aramco chairman Yasir al-Rumayyan said.

The final offer price and the number of shares to be sold “will be determined at the end of the book-building period,” said the firm, headquartered in the eastern city of Dhahran.

Aramco had initially been expected to sell a total of five percent on two exchanges, with a first listing of two percent on the Tadawul Saudi bourse followed by a three percent listing on an overseas exchange.

“For the (international) listing part, we will let you know in due course,” Rumayyan said. “So far it’s only on Tadawul.”

There have been reports the firm is struggling to get institutional investors on board, amid a bearish outlook for the energy sector and questions over the company’s transparency and governance.

Aramco says IPO timing depends on ‘market conditions’