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Saudi Aramco Poised To Announce IPO Plan In October

Amid reports that Saudi Arabia has moved to speed up the listing of its oil giant Aramco and amid conflicting reports about the impact of the attacks on Saudi oil on what would be the world’s largest IPO ever, the latest report coming out of the Kingdom is that Aramco is set to announce as soon as next month its intention to proceed with the initial public offering.

Aramco will officially announce its intention to sell shares on the stock market at some point around October 20, people familiar with the planning told Bloomberg on Wednesday.  

The attacks on the Abqaiq facility and the Khurais oil field in Saudi Arabia on September 14 had investors anxious as the Kingdom had just accelerated plans to list Saudi Aramco. The heightened security risks following the attacks and Aramco’s actual ability to restore production could undermine the valuation of the company at this time, analysts believe.

Before the attacks, reports had it that Aramco could list shares on its domestic stock exchange as early as in November 2019.

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According to one of Bloomberg’s sources, November indeed could be a targeted timeline for listing shares of Aramco on the Saudi stock market.

The details of the listing and a timeline will depend on market conditions and demand from investors, Bloomberg’s sources said.  

Aramco is also said to be holding meetings this week with more than a dozen junior underwriters as part of the IPO process.

Related: World’s Longest Elevator Could Trigger New Commodity Race

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The Financial Times reported last week that Riyadh is using somewhat unconventional methods to secure anchor investors for the offering from the local billionaires that the government targeted in a so-called anti-corruption probe last year.

In another fresh report about the IPO, The Wall Street Journal reported that Aramco is considering the offer of not 5 but 10 percent of its stock in the much-hyped IPO that has been delayed several times already.

At the beginning of this month, the top managers of the Saudi state oil firm reiterated that it’s up to the sole shareholder of the company—the Kingdom of Saudi Arabia—to decide when the listing will take place.  

Even after the attacks, Aramco’s CEO Amin Nasser continued to claim that “We have said we are ready and will proceed with the IPO when our shareholder takes the decision.”  

By Tsvetana Paraskova for Oilprice.com

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