The Strategist

Saudi Aramco calls on banks to participate in the largest IPO

08/21/2019 - 10:53

IPO Saudi Aramco is one step closer to reality. A few days ago, the state-owned oil company of Saudi Arabia called on a number of banks to take part in the long-awaited IPO.

almost witty via flickr
almost witty via flickr
Aramco's formal request that banks put forward their proposals is already a positive development for the IPO, although banks expect the largest IPO to be ahead of the difficult period.

Last week, Aramco Senior Vice President Khalid H. Al-Dabbagh said that he would announce the IPO date when the authorities define it. He made this commentary a few days after Aramco presented its financial results for the first half of the year. Aramco net profit for the first half of the year was $ 46.9 billion, 12% lower than in the first half of 2018.

Initially, the Aramco IPO was announced 3 years ago, and were it not for the volume of shares offered for sale, 5% of the IPO could be lost after many delays. But even this 5% stake, worth $ 2 trillion, was enough to keep the promised deal in the spotlight.

According to recent reports, an IPO could happen as early as 2020, but Saudi officials say it may take place around 2020 or 2021.

At that, valuation of Aramco could be a stumbling block, and the period of low oil prices is unlikely to be the best time for an IPO.