Saudi Arabia’s Crown Prince Mohammed bin Salman has approved an initial public offering (IPO) for Saudi Aramco, the largest oil company, Bloomberg writes. The decision was made on November 1, and it can be officially announced on November 3.
IPO exit conditions
Saudi Aramco plans to pay $ 75 billion in dividends in 2020 with a promise not to reduce this figure until 2024, regardless of what oil prices and their dynamics will be.
- Dozens of the largest international banks fought for the right to service Armaco’s IPO. Bloomberg calls their confrontation “one of the hottest.”
- As a result, more than 20 banks will work on the placement, including Citigroup, Goldman Sachs and JPMorgan.
In 2016, for the first time, Mohammed bin Salman announced plans to put Saudi Aramco on the stock exchange but in August 2018 the decision was cancelled by decision of the King of Saudi Arabia. Bankers, members of the royal family and heads of oil companies convinced him that an IPO could adversely affect the country’s economy.
- In July 2019, it became known that preparations for the IPO resumed.
- In early October, Bloomberg wrote that during an initial public offering on Riyadh, Saudi Aramco expects to sell 2% of its shares for $ 40 billion. This meant that the entire company would be valued at $ 2 trillion, which would break the record of Chinese Alibaba, which in 2014 in IPO managed to raise $ 25 billion
- In preparation for the initial public offering, the head of the board of directors of Saudi Aramco was replaced.
What is Saudi Aramco
This is the national oil company of Saudi Arabia, and the largest oil company in the world in terms of oil production and oil reserves. In 2018, Saudi Aramco received a world record profit of $ 111 billion with total revenue of $ 355.9 billion. 100% of the company is controlled by the government of Saudi Arabia.