Saudi Aramco’s record IPO starts Nov 17, prospectus says – World

Saudi Aramco's long-awaited initial public offering will begin on November 17, according to the company's prospectus, without revealing the size of the sale of the stake or the price range.

The 658-page document, published just before midnight on Saturday, said the final price of the shares will be determined on December 5, one day after the subscription closes, in what is expected to be the largest IPO of the world.

After years of delays and false starts, Aramco officials announced last week a sale of shares in the Riad stock exchange for the most profitable company in the world, which pumps 10 percent of the world's oil.

The prospectus says that the state giant will sell up to 0.5 percent of its shares to individual investors, while it has not yet decided the percentage for larger institutional investors.

"The target percentage of the supply shares assignable to individual investors will be up to 0.5 percent of the shares," the prospect said.

The document also highlighted risks that include the potential for terrorist attacks, the possibility of antitrust legislation and concerns about climate change that could reduce the global demand for hydrocarbons.

But investors in Saudi Arabia seem to be salivating at the prospect of owning a part of the company, seen as the crown jewel of the kingdom, in the IPO.

It would be the largest in the world if it outshines the $ 25 billion list of Chinese retail giant Alibaba in 2014.

The prospect named a large number of international banking giants, from Citibank to Credit Suisse and HSBC, which he has hired as financial advisors and bookmakers.

Cash cow

Saudi Arabia is doing everything possible to ensure the success of the IPO, a cornerstone of the ambitious plans of the Crown Prince of Saudi Arabia Mohammad bin Salman to ward off the oil economy by pumping tens of billions of dollars to a large amount of megaprojects and non-energy projects. industries.

According to reports, the government has pressured wealthy Saudi business families and institutions to invest in the IPO, and many nationalists have described it as a patriotic duty.

The firm has said that there were no current plans for an international sale of shares, indicating that the long-discussed objective for a second offer in a foreign exchange had been set aside.

Initially, Aramco was expected to sell a total of five percent on two exchanges, with a first quote of two percent on the Tadawul Saudi stock exchange followed by a three percent quote on a foreign exchange.

It is not clear if Aramco will get the $ 2 billion valuation the crown prince expected, and investment research firm Bernstein estimates it could fall between $ 1.2 and $ 1.5 billion.

There are also reports that the company is struggling to get institutional investors on board amid a bearish outlook for the energy sector and questions about the company's transparency and governance.

The sovereign fund of Norway, the largest in the world, has said it does not plan to invest in Aramco, a Norwegian official said. AFP.

Investors are also concerned about the geopolitical risks that weigh on the action.

The news on the list comes only weeks after the paralyzing attacks in the heart of the Aramco facilities cut production in half amid an increase in tensions with Iran.

But China, the world's leading oil importer, can commit up to $ 10 billion through sovereign wealth funds and other state-owned companies, Bloomberg News reported.

The company, a cash cow that catapulted the kingdom to become the largest economy in the Arab world, also has huge appeal for retail investors.

Many Saudis seem to be turning to lenders and selling personal assets to raise money to invest in the sale of shares.

Aramco last year recorded $ 111.1 billion in net profits. In the first nine months of this year, its net profit fell 18 percent to $ 68.2 billion.

Source: https://www.dawn.com/news/1516029/saudi-aramcos-record-ipo-starts-nov-17-prospectus-says

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