Saudi Arabia’s preparations to list Saudi Arabian Oil Co. are in full swing, with the company expected to publish its prospectus before the end of the month, people familiar with the matter said, paving the way for a final decision soon after on whether to proceed with the float.
Aramco, as the oil giant is known, is in the final stages of preparing to list shares on the domestic Tadawul exchange, as the government pursues a key part of Crown Prince
Mohammed bin Salman’s
economic-reform program. The crown prince plans to list 5% of Aramco, through a domestic and a later planned international listing, to raise billions of dollars to diversify Saudi Arabia’s economy from its dependence on oil. Until recently, progress has been fitful.
The prospectus, which will be published in Arabic on Oct. 25 and in English two days later, according to a document outlining the timeline seen by The Wall Street Journal, will be used to market the shares of the state-owned company. This will precede a book-building process in November during which Aramco will test interest in the company’s shares, the people said. A decision on whether to go ahead would likely be made after the book building.
The response of investors during the roadshow will inform the final offer price of the shares and whether the current sole shareholder—the Kingdom of Saudi Arabia—decides to move forward with listing 1% to 2% of the company domestically, they said.
The crown prince has indicated he wants a $2 trillion valuation for the world’s most profitable company, but analysts and Aramco executives working on the initial public offering have pegged the company’s value at closer to $1.5 trillion. The IPO was initially delayed from its original launch date of 2018 due to questions over the valuation and venue for the international listing.
If the domestic listing is confirmed, Aramco’s shares are expected to trade on the Tadawul exchange by late November or early December, the people said.
Aramco didn’t immediately respond to an emailed request for comment.
Saudi Arabia opened its domestic market to institutional foreign investors in 2015, which enables them to participate in IPOs. The plan is to list Aramco first domestically, and then internationally, in 2020 or 2021.
Aramco has already been conducting informal roadshows with investors in Asia, Europe and the U.S. in recent weeks, said two of the people. The company also is in discussions with what are known as cornerstone investors for the domestic listing.
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