Saudi Arabia formally announced its initial public offering (IPO) for Saudi Aramco, a state-owned oil firm on Sunday. It added the domestic listing would take effect this December. The market regulator of the kingdom approved the listing on 3rd November, but exact particulars surrounding the scope and size of the IPO remain unidentified. Saudi Aramco said in a statement that the closing offer price, percentage of shares to be sold along with a number of shares to be sold would calculate at the book-building period end. Chief executive and president of Saudi Aramco, Amin Nasser, stated that the vision of the company, to become the pre-eminent chemicals company and integrated energy of the world.
Nasser said the mission of the company is to provide its investors with long-standing value creation through price cycles of crude oil by keeping its supremacy in oil and gas production, catching additional value across the value chain of hydrocarbon and cost-effectively growing its portfolio. Nasser said the IPO prospectus of the company would release on 9th November He told news website CNBC that the move of Aramco listing was the effort to expand the economy and a technique to strengthen the internal Tadawul exchange by attracting domestic as well as international investment.
He said they feel proud of the listing of Saudi Aramco. It will increase the visibility of Aramco and Saudis internationally. By sharing numerous information, as needed by any listed organization, there will be many analysts that will evaluate their information and compare it with other listed firms. Their company would love to have that type of comparison because they proud of their results, Nasser said.
Chairman of Aramco Statement
Yasser al-Rumayyan, the chairman of Aramco, said in a press conference that the worldwide listing would decide on moving forward. Also, he denied commenting on the valuation of the firm, or the percentage to the list. Rumayyan told CNBC that the firm would be a safe zone for investors in spite of some concerns about the security of the infrastructure of Saudi oil following a drone attack on Saudi Aramco oil facilities in September. He said that they also have the flexibility of the company, and it really established in the 14th September attacks. The company has 1/8th of the production of oil in the world, and oil traders saw it as a one-off event and really safe.
Previous reports suggested the Saudi Kingdom will list one percent to two percent of Aramco on its domestic stock exchange, after that list another share on an international exchange at a later date, with an overall public sale of around five percent of the company. Exchanges in Tokyo, London, New York, and Hong Kong have all competing for the international listing.
Saudi Aramco is the largest integrated oil & gas company in the world. Crown Prince Mohammed bin Salman valued the company at about $2 trillion, but Reuter’s quote bankers and firm insiders as saying its worth become closer to $1.5 trillion. IPO of Saudi Aramco has deeply-expected during the last some years but delayed because of oil price volatility, the location of the share listing, valuation ambiguity, and geopolitical events like the missile and drone attack in September. The IPO might be the largest of the world, and if it attains a valuation of $1.5 trillion, Aramco will beat the market capitalization of market giants such as Microsoft and Apple.
The IPO listing seen as part of the economic reform plan of the crown prince, recognized as Vision 2030. Aramco said one of its priorities delivering growth and sustainable dividends through the price of crude oil cycles. The board aims to announce aggregate usual cash dividends of as a minimum $75 billion regarding the calendar year 2020, along with any potential special dividends. Reuters reported last week that the firm would start trading on the Tadawul on 11th December. Al Arabiya said citing anonymous sources that pricing will begin on 17th December with an ultimate price for the float estimated to announced on 4th December.
Saudi Aramco noted that its production of crude oil accounted for almost one in every eight barrels of crude oil produced internationally from the year 2016 to 2018. In the 2019 first six months, the firm produced about 13.2 million barrels per day of oil equivalent, including ten million barrels per day of crude oil.