The Strategist

Aramco selects nine banks for IPO

09/12/2019 - 03:24

Saudi energy company Saudi Aramco has invited nine major banks as global coordinators for the initial public offering of its shares.

The list of invited banks includes Citi, JP Morgan, Morgan Stanley, Credit Suisse, Bank of America Merrill Lynch, HSBC, Goldman Sachs, the Saudi National Commercial Bank and Samba Financial Group.

For several years now Saudi Aramco has been preparing for the initial public offering, which is expected to become the largest in the world. According to Reuters, the Saudi authorities estimate the company at $ 2 trillion.

The IPO date is constantly being postponed, and now it’s scheduled of 2020. In preparation for this procedure, authorities in early September decided to change Head of Board of Directors of Saudi Aramco.

In addition, Saudi Aramco may divide the initial public offering (IPO) of its shares in two stages, writes The Wall Street Journal.

According to the sources of the publication, the company’s management is considering an option in which 1% of the shares will be placed in Riyadh in 2019, and another 1% - in 2020.

The next stage will be listing on one of the international exchanges, among possible options are London, New York, Hong Kong and Tokyo. In total, the company plans to place about 5% of its shares on exchanges and expects capitalization in the amount of about $ 2 trillion.

Analysts estimate the market value of Aramco at about $ 1.5 trillion.

According to various estimates, the initial placement of 1% of the shares will allow the company to attract $ 15 billion from local and international investors and will become the largest IPO in the history of Saudi Arabia.