Aramco IPO Update - Nov 4

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Saudi Aramco kick-starts what could be world's biggest IPO, offers scant details

DHAHRAN, Saudi Arabia/DUBAI (Reuters) - 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 told Reuters the oil company could offer 1%-2% 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 (BABA.N) 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.

Read more: https://www.reuters.com/article/us-saud ... SKBN1XD02V

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Aramco accounted for about one in every eight barrels of crude oil produced globally from 2016 to 2018, it said on Sunday.

Its net income for the third quarter of 2019 amounted to $21.1 billion, according to Reuters calculations, dwarfing the income for the same period of oil giants such as Exxon Mobil Corp (XOM.N), which was just over $3 billion.