Saudi Aramco to offer IPO on domestic stock market

The Oil Supply Planning and Scheduling OSPASSaudi Aramco, the world’s largest integrated oil and gas company, has announced its intention to proceed with an initial public offering (IPO) on Riyadh’s Tadawul Stock Exchange

The government intends to sell a portion of its shares in Saudi Aramco, according to a press release issued by the company.

The kingdom’s Capital Market Authority (CMA) approved the company’s application for the initial public offering.

The price at which all subscribers in the offering will purchase shares (the “Final Offer Price”) will be determined at the end of the book-building period.

Saudi Aramco is the world’s largest integrated oil and gas company with a unique investment proposition. The company’s crude oil production accounted for approximately one in every eight barrels of crude oil produced globally from 2016-2018.

Yasir Othman Al Rumayyan, chairman of the Board of Directors of Saudi Aramco and governor of the Public Investment Fund, said, “This marks a significant milestone in the history of the company and important progress towards delivering Saudi Vision 2030, the kingdom’s blueprint for sustained economic diversification and growth.”

“The company has a strong track record of creating value for its current shareholder, the government. I look forward to welcoming new shareholders who, I am confident, will benefit from the company’s reliability and continued growth,” he said.

Amin H. Nasser, president and CEO of Saudi Aramco, said, “Saudi Aramco’s vision is to be the world’s pre-eminent integrated energy and chemicals company.

“We are a steadfast contributor to the world’s energy security. Our mission is to provide our shareholders with long-term value creation through crude oil price cycles by maintaining our pre-eminence in oil and gas production, capturing additional value across the hydrocarbon value chain and profitably growing our portfolio.”

With a comprehensive and disciplined process for capital expenditures, the company seeks to maintain a prudent and flexible balance sheet, he pointed out.

The company stated that the offering would consist of a sale by the government of a portion of its shares of Saudi Aramco and would solely comprise existing shares.

The offering is being made available to qualifying individual investors and institutional investors.

The company and the selling shareholder will be subject to restrictions on the sale, disposition or issuance of additional shares, the details of which will be provided in the prospectus.

The CMA has issued certain exemptions to streamline the application process for foreign investors, said the press release.

According to wam.ae, the company is expected to list a one-per-cent stake on Riyadh’s Tadawul Stock Exchange before the end of 2019, and another one per cent in 2020. It then plans to launch an international offering in 2020 or 2021, said the report.

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