The Strategist

Saudi Aramco confirms forthcoming IPO

11/05/2019 - 07:33

Saudi Arabia has officially announced plans to conduct an IPO of its state-owned oil and gas company Saudi Aramco.

According to the report, the shares of the world's largest integrated company will be offered on the Saudi Arabian stock exchange, Tadawul.

The offering price and the final number of shares to be offered will be determined at the end of the application collection period. The offer is available to individual investors (citizens of Saudi Arabia, foreign citizens residing in the territory of the country, as well as citizens of countries of the Council for Cooperation of the Arab States of the Persian Gulf) and qualified (institutional) investors.

For the participation of foreign companies in the IPO, the Saudi Arabian Capital Markets Authority has simplified the conditions for obtaining the status of a qualified investor, the report says. Foreign companies have the right to participate in IPOs through a depository in Saudi Arabia.

The placement involves a large-scale pool of international banks: Citigroup, Credit Suisse, Goldman Sachs, HSBC Saudi Arabia and others have been appointed global coordinators and collaborative bookmarkers of IPO Saudi Aramco. 

According to the company, one of the banks will be appointed as a stabilizing agent and will receive the right to acquire an additional 15% of the total number of offered shares at the offering price. This option may be exercised partially or fully within 30 calendar days from the start of official trading on the exchange.

IPO of Saudi Aramco is expected to be the largest in history. By placing a 2% stake in the first stage, the company can raise $ 40 billion. Saudi Aramco in 2018 received a net profit of $ 111 billion, which makes it the most profitable company in the world. The company's net profit for the first nine months of 2019 amounted to $ 68 billion, revenue - $ 244 billion, free cash flow - $ 59 billion.