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The New York Stock Exchange is the favorite for the massive upcoming Saudi Aramco listing, according to a report by the Wall Street Journal on Monday.
London and Toronto’s exchanges are also being considered, but with less zeal, the Journal said, citing anonymous sources familiar with internal discussions on the matter.
The initial public offering, expected to value Aramco at $2 trillion when listed in the first half of 2018, is part of the Kingdom’s plan to diversify its fossil-fuel-dependent economy.
There are still several facets of the deal that government workers and corporate executives need to sort out before the IPO.
Released last year, the Vision 2030 plan vowed to “transform Aramco from an oil-producing company into a global industrial conglomerate,” but senior-level officials are now concerned with the complications the category would create in valuing the state-run corporation ahead of its partial sale.
Reports from last Friday indicate that the officials responsible for organizing the largest IPO in financial history were still debating whether to label the state-run company as an industrial conglomerate or a specialized international oil firm.
"There are two options being studied now,” an anonymous source from the Kingdom’s energy sector said. “Either to make Aramco a pure oil and gas company, or a conglomerate and expand its role in petrochemicals and other sectors.”
Over the past couple of years, Aramco has entered into contracts with General Electric for a shipbuilding project while engaging renewable energy companies for new solar and wind energy ventures. Executives are concerned the newer add-ons will not be of interest to the foreigners that they project will purchase Aramco shares. As a result, a faction of those planning the IPO contend that all projects unrelated to oil and gas operations should be placed in a separate entity before shares are sold.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…