Tuesday, February 18, 2020

IPO of world’s largest oil company Saudi Aramco is set to start rolling

IPO's hot phase of attracting investors will began on 3 November

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Zubair Yaqoob
Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com He can be reached at: [email protected]

The IPO of the world’s largest oil company Saudi Aramco is set to start rolling. Global  financial circles were convinced that the hot phase of attracting investors began on November 03, starting on December 04, stocks can be ordered in a then fixed price range and on December 11, the shares can be traded on the stock exchange for the first time.

Saudi Aramco released the earnings figures for the current year, which apparently serve as a purchase argument for the stock. Thus, Saudi Aramco earned $68 billion in the first months of this year, more than the world’s most profitable companies, as Apple and Exxon show net income.

Saudi Aramco earned $68 billion in the first months of this year

According to reports, the previously purely state-owned oil company Saudi Aramco is to sell 1 to 2 percent and place it on the stock exchange. With an announced issue volume of more than $20 billion, it would be one if not the largest IPO ever. The previous record holds the Chinese online retailer Alibaba, who collected in 2014 with its IPO $21.8 billion.

Alibaba with its IPO in 2014 collected, $21.8 billion

Saudi Crown Prince Mohammed bin Salman first brought an initial public offering to Saudi Aramco three years ago. But the step on the floor was delayed repeatedly. It was not until the middle of the month that Saudi Aramco decided to postpone the first mission after the attacks on conveyor systems in the heart of the Saudi Arabian oil industry. Advisers should be given time to search for anchor investors.

Among the banks that are now helping to sell the shares, is also the Deutsche Bank.  However, Deutsche Bank does not belong to the nine strong institutes of the first group in the bank consortium “global coordinators” but with fifteen other banks to the second-ranked assistants “joint bookrunners”. Overall, the banking syndicate for the sale of shares is reported to be paid at around $500 million.

Russian sovereign wealth fund Russian Direct Investment Fund (RDIF) claims to be working on an investor consortium for the initial public offering of Saudi Aramco

Crown Prince Mohammed wants to finance the restructuring of the economy with the proceeds from the IPO of Saudi Aramco, he is planning a gigantic infrastructure project between the Red Sea and the Gulf of Aqaba, where companies from all kinds of industries, such as the energy and water industries, biotechnology and the entertainment industry, are to settle. The strategy will make the kingdom less dependent on the oil and gas sector, which has so far contributed the bulk of Saudi Arabian export revenues.

The Russian sovereign wealth fund Russian Direct Investment Fund (RDIF) claims to be working on an investor consortium for the initial public offering of Saudi Aramco. “There are several Russian pension funds that are interested in investing in the Aramco IPO”, Reuters RDIF chief Kirill Dmitriev revealed. “We also received information from our Russia-China fund that some large Chinese institutions are also interested in going public with Aramco”, Dmitriev said.

Zubair Yaqoob
Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com He can be reached at: [email protected]

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