Business Essentials for Professionals


Aramco’s Planned IPO To Being On Nov. 3: Reuters

Aramco’s Planned IPO To Being On Nov. 3: Reuters
A Reuters report based on information from sources claimed that Saudi Aramco is set to announce the launch of its Initial Public Offering (IPO) on November 3. The much awaited IPO, the largest ever in history, had been delayed a number of times – including earlier this month, so that advisers have time to strike deals with cornerstone investors.
The sources said that the Aramco wants to float about 1 to 2 per cent of its total value at the Tadawul market of Saudi Arabia which is estimated to be worth more than $20 billion.
The company “does not comment on rumor or speculation. The company continues to engage with the shareholders on IPO readiness activities. The company is ready and timing will depend on market conditions and be at a time of the shareholders’ choosing”, Aramco, in response to queries by Reuters.
The Reuters report did not name the sources.
Yassir al-Rumayyan, the head of the Saudi Arabia’s sovereign wealth fund, said that more shareholders from institutions will soon be added to Aramco.
Saudi-owned news channel Al-Arabiya said in a news flash on Tuesday citing sources that Aramco will start subscription for investors in its initial public offering on December 4. The broadcaster further reported that transaction’s price would be announced by the oil company on November 17 and added that trading on the stock will be initiated by the company at the local stock market, the Tadawul, on December 11.
Three years ago since the since Saudi Crown Prince Mohammed bin Salman first flagged it, Wall Street has been abuzz with anticipation of Aramco selling to the public a portion of its stocks. But analysts and investors have been questions the valuation of 42 trillion that the Crown Prince had attached to the company. The Saudi government has been focusing on shifting its economy away from dependence on oil in order to play its part in reducing global warming that had pout oil prices under pressure and had undermined the equity value of the oil producer.
Chief executive of Russia’s sovereign wealth fund, the Russian Direct Investment Fund (RDIF), said that a consortium of investors for Aramco’s IPO was being worked on by it. “There are several Russian pensions funds who are interested to invest in the Aramco IPO and we have also received indications from our Russia-China fund of some Chinese major institutions also interested in Aramco IPO,” Russian Direct Investment Fund (RDIF) head Kirill Dmitriev told reporters.
Separately, the sovereign wealth fund’s managing director Farouk Bastaki said that the Kuwait Investment Authority (KIA) had not been approached by Aramco to invest in the IPO.
“KIA has not been approached by Aramco or its advisers for the IPO, and KIA will look at the IPO like any other investment,” Bastaki told reporters on the sidelines of an investment conference in Riyadh.
There were also no comments made by Singapore Exchange Limited’s chief executive Boon Chye Loh when asked about whether there were any talks between the exchange and Aramco about a possible listing in Singapore of Aramco.
“As an exchange that offers efficient access into almost 100% of Asia, we are as attractive as any other exchange for any other company looking for capital raising,” he said on the sidelines of the conference in Riyadh.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc