Aramco Officially Launches IPO Plans
On Sunday, Saudi Arabian state oil company Aramco officially launched its long-awaited IPO which is expected to be the largest share sale in history, according to The Wall Street Journal.
Saudi Crown Prince Mohammed bin Salman has delayed the IPO for over four years but gave the green light on Sunday. He hopes that the IPO will bring in the proceeds he needs to reform the Saudi Arabain economy and diversify its industrial reach according to his economic reformation agenda.
Saudia Arabia's market regulator approved the company's application for an IPO on the Saudi domestic exchange, Tadawul. “Today is a profoundly important day for the kingdom of Saudi Arabia,” Aramco Chairman Yasir al-Rumayyan said. Aramco plans to sell its share on the Saudi Arabian domestic exchange first by December before attempting an international IPO.
Prince Mohammed initially targeted $2 trillion for the valuation of the company, but advisors put the real value between $1.6 trillion to $1.8 trillion. The concern over a $2 trillion valuation is that investors will not buy at that price. The company has not disclosed its official offering price or how much of the company it will list.
“Let the market dynamics and those discussions drive the value and what the pricing should be for that IPO,” said one potential investor. “The ego, pride and everything should be secondary.” In 2018, Aramco reported net income of $111 billion, making it the most profitable company in the world.
Aramco has officially been giving the green light on its initial public offering from Saudi Crown Prince Mohammed bin Salman as it attempts to become the largest share sale in history.