ARAMCO LISTING TO START ON NOV 17
Final share price will be determined a day after subscriptions close on Dec 5, according to oil giant’s prospectus
SAUDI Aramco’s much-anticipated initial public offering (IPO) will begin on Nov 17, said the company’s prospectus, without revealing the size of the stake sale or the pricing range.
The 658-page document, released just before midnight on Saturday, said the final share price would be determined on Dec 5 — a day after the subscriptions closed — in what was expected to be the world’s biggest IPO.
After years of delays and false starts, Aramco officials last week announced a share sale on the stock exchange, here, for the world’s most profitable company, which pumps 10 per cent of the world’s oil.
The prospectus said the state giant would sell up to 0.5 per cent of its shares to individual investors while it had still not decided on the percentage for larger institutional investors.
The document also highlighted risks, including the potential for terrorist attacks, the possibility of anti-trust legislation and climate change concerns that might reduce global demand for hydrocarbons.
But investors in Saudi Arabia appear to be salivating at the prospect of owning a piece of the company — seen as the kingdom’s crown jewel — in the IPO.
It would be the world’s biggest if it eclipses Chinese retail giant Alibaba’s US$25 billion (RM103.25 billion) listing in 2014.
The prospectus named a host of banking giants — from Citibank to Credit Suisse and HSBC — that it has hired as financial advisers and bookrunners.
Saudi Arabia is pulling out all the stops to ensure the success of the IPO, a cornerstone of Crown Prince Mohammed Salman’s ambitious plans to steer the economy away from oil by pumping tens of billions of dollars into a host of mega projects and nonenergy industries.
The government has reportedly pressed wealthy Saudi business families and institutions to invest in the IPO, and many nationalists have labelled it a patriotic duty.
The firm has said there were no current plans for an international stock sale, indicating that the long-discussed goal for a second offering on a foreign bourse has been put aside.
Aramco had initially been expected to sell a total of five per cent on two exchanges, with a first listing of two per cent on the Tadawul Saudi bourse followed by a three per cent listing on an overseas exchange.
It is unclear whether Aramco will get the US$2 trillion valuation the crown prince had hoped for with investment research firm Bernstein estimating it could fall between US$1.2 trillion and US$1.5 trillion.
There are also reports the company is struggling to get institutional investors on board amid a bearish outlook for the energy sector and questions over the company’s transparency and governance.
Norway’s sovereign wealth fund, the world’s largest, was not planning to invest in Aramco, said a Norwegian official.
But China, the world’s top oil importer, may commit as much as US$10 billion through sovereign wealth funds, Bloomberg News reported.