Published: Mon, November 04, 2019
Money | By Ethel Goodwin

Saudi Arabia announces IPO of world's most winning company

Saudi Arabia announces IPO of world's most winning company

Ellen Wald, author of "Saudi Inc.", said that listing on the domestic market without any plans for an global offering was risky because it could "completely overweight" the local market.

The oil facilities belonging to Aramco were attacked in mid-September, which resulted in a temporary sharp decrease in the kingdom's oil output.

Aramco executives will now embark on an worldwide roadshow to court investors, and a prospectus outlining the company's financial details is expected later this month. Effective Jan. 1, 2020, it will adopt a progressive royalty scheme, with a marginal rate set at 15% up to $70 per barrel, 45% between $70 and $100, and 80% if the price rises higher. By announcing the start of the IPO on Sunday, Prince Mohammed may have been convinced to take a lower valuation in order to get the IPO moving.

It holds a monopoly in Saudi Arabia, the world's largest exporter of crude oil.

Aramco had initially been expected to sell a total of five percent on two exchanges, with a first listing of two percent on the Tadawul Saudi bourse followed by a three per cent listing on an overseas exchange.

Saudi Aramco chairman Yasir al-Rumayyan told the news conference that the valuation for the company should be determined after the roadshow.

Saudi Aramco IPO given go-ahead by Crown Prince.

Saudi Aramco is thought to be worth about $1.2tn (£927bn).

Drone-hit Saudi Aramco on Sunday confirmed that it is planning to list on the Riyadh stock exchange, calling it a milestone in the history of energy blockbuster.

Aramco, which pumps about 10% of the world's oil, generated the most profit of any corporation previous year with net income of $111 billion - more than Apple, Google's parent Alphabet and Exxon Mobil combined.

March 27, 2019 Saudi Aramco said it would buy SABIC in $69 billion chemicals mega deal.

Aramco was expected to launch the first part of a two-stage IPO in October.

Whatever this local round achieves, with domestic players being strong armed into investing, global investors are still going to value this well below the expectations of (Crown Prince) Mohammed bin Salman. The original plan to list Aramco in either NY or London has been dropped in favor of a Riyadh-only flotation.

Saudi Crown Prince Mohammed bin Salman has spoken of a $2 trillion value target for the world's largest oil producer while banks have provided varying figures.

Final meeting of the Saudi authorities on Friday night was to decide whether to go ahead with the list.

Aug 11, 2017 - Saudi Arabia favors NY for Aramco listing despite risks for the main foreign listing, people familiar with the matter tell here Reuters.

But Aramco is advised by the cream of financial institutions in Wall Street and the financial centers of Europe, which will be well paid to ensure that the IPO is a success among foreign investors.

March 23, 2017 Saudi Aramco picks Samba Capital as local IPO adviser, sources tell Reuters.

The 21-page document published by Saudi Aramco on Sunday in Dhahran seemed nearly anticlimactic, after all the hype that had initially surrounded it.

Credit rating agency Fitch recently downgraded Saudi Arabia's rating from A+ to A, citing "increased geopolitical and military tensions in the Gulf region", in addition to "the vulnerability of Saudi Arabia's economic infrastructure, and continued deterioration in Saudi Arabia's fiscal and external balance sheets".

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