‘Historic moment’: Saudi Arabia’s Aramco officially kick-starts IPO procedure
Saudi oil giant Aramco has kick-started a formal procedure for its much-anticipated initial public offering (IPO), boosting the kingdom’s development plans and paving the way for it to diversify its economy.
Riyadh’s Capital Market Authority (CMA) has approved Aramco’s application “for the registration and offering of part of its shares,” the regulator confirmed on Sunday. It did not set the time frame for the IPO of the company, only saying the listing request will be carefully reviewed to rule out “high risk.”
Aramco has also confirmed the listing but did not expand on how much of the company it would sell. It is estimated, however, that the state-run corporation could offer up to 2 percent of its shares on the domestic stock exchange, called Tadawul, raising between $20 and $40 billion.
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The process would be split into two phases: one for institutional investors and one for individual investors. A final price for the stock will be determined in early December, and shares will then begin to be traded on Tadawul. The kingdom expects a $2 trillion valuation for the company, of which $100 billion will be spent on development programs.
Less optimistic estimates set the valuation at $1.5 trillion, but in that case Aramco would still be worth at least 50 percent more than the world's most valuable companies like Microsoft and Apple, according to Reuters.
The oil giant was in the spotlight in mid-September when its facilities in Abqaiq and Khurais were targeted in a drone and missile attack, cutting the whole country’s crude production in half. The strike was quickly blamed on Iran although it vehemently denied any involvement.
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