Saudi Aramco Ready for IPO in H2 2018

Saudi Arabian Oil Company is ready for its initial public offering in the second half, with the government yet to decide where to list the shares, Chief Executive Officer Amin Nasser said.

The kingdom will decide where the stock will be traded, not the company, Nasser said Thursday at Aramco's headquarters in Dhahran, in eastern Saudi Arabia, Bloomberg reported.

"One option being considered is selling the shares locally and then overseas. There is no shortlist of possible exchanges and talks are ongoing to decide on bank roles," he said.

“We are ready and prepared for the IPO in the second half of the year. We can list at home and abroad at the same time but it’s not our decision. We are waiting for the government to tell us where to list so that we prepare for the venue.”

Saudi Arabia is seeking to sell as much as 5% of Aramco as part of a plan by Crown Prince Mohammed bin Salman to set up the world’s biggest sovereign wealth fund and reduce the economy’s reliance on hydrocarbons.

The sale could be the largest ever, based on the government’s $2 trillion valuation of the company.

The share sale has drawn interest from international stock exchanges in London, New York, Hong Kong, Singapore, Tokyo and Toronto, and even spurred US President Donald Trump and UK Prime Minister Theresa May to lobby for the listing.

The listing has seen intense competition by banks from New York to Tokyo for a role on the deal.

Aramco is set to appoint lenders, including Goldman Sachs Group Inc., Citigroup Inc. HSBC Holdings Plc, JPMorgan Chase & Co and Morgan Stanley to help manage the sale, people familiar said this month.

Banking sources and industry insiders said on Thursday the banks that will advise and execute Aramco’s stock market listing are expected to share a tiny proportion of the $100 billion Riyadh hopes to raise in its initial public offering.

Banks are competing fiercely for mandates in the IPO because it is viewed as a gateway to other deals expected to emerge from Saudi Arabia’s plan to revamp its economy via privatization.

Saudi Aramco is known for having paid relatively low banking fees in the past, banking industry sources said. The company declined to comment when asked how much it would offer for this IPO.