London and New York exchanges on alert for $30bn Aramco float
SAUDI Aramco is considering a $30bn (£24bn) float of its trading arm in a move likely to spark a battle between London and New York to attract the world’s biggest company.
When Aramco announced plans to go public in 2017, the City, Wall Street and other major financial centres began a frantic race to secure what was expected to be the largest flotation in history.
London even proposed a change in its rules to accommodate the company, which could have joined the FTSE index without committing to standard corporate governance requirements.
Aramco eventually floated in Saudi Arabia in 2019, raising $29.4bn by listing only 1.7pc. Earlier this month it overtook Apple as the most valuable company in the world after hitting a market capitalisation of about $2.4 trillion.
The state-owned giant is now working with banks such as Goldman Sachs, JP Morgan and Morgan Stanley to sell about a third of its holding in the trading division amid booming oil prices, Bloomberg reported.
Other major oil producers have mostly kept their trading units under wraps, wary of revealing the secrets of a significant source of profit. Aramco is still debating the merits of the potential listing.
Energy companies in the Middle East have been taking advantage of high oil prices to list assets. Aramco is also considering listing its refining company Luberef. The Middle East has emerged as a bright spot for flotations as oil prices above $100 a barrel fill energy companies’ coffers. Russia’s invasion of Ukraine and hawkish central bank policies have put a lid on listings around most of the globe, but the Gulf has so far avoided most of the volatility and global investors have flocked to offerings in the region.
Aramco on Sunday posted its highest profit since its record stock market listing after oil prices jumped in the wake of the Ukraine war.
Saudi Arabia is one of the few major petroleum producers trying to boost output capacity. Aramco will increase output capacity to more than 13m barrels a day over the next five years, cementing its position as the world’s largest oil producer.