Saudi Aramco presses ahead with IPO

Saudi Aramco is pressing ahead with its listing plans this week. The state-owned oil group will meet local Saudi banks to discuss the initial public offering (IPO) plans, but bankers at international lenders working on the IPO told Reuters there had been no communication from Aramco’s management on any delay. Aramco is continuing to prepare for a local IPO, which the sources said may happen as early as November. Aramco plans to sell 1 per cent this year, in a potential $20 billion deal, and another 1pc in 2020 in Riyadh ahead of an international sale.

Three sources close to the deal said meetings scheduled this week with Saudi banks to discuss the underwriting work they will do in the offering are still scheduled to take place. The Aramco IPO is a pillar of an ambitious economic diversification drive by Crown Prince Mohammed bin Salman, who has put the firm’s valuation at $2 trillion. The domestic flotation is the first step of a targeted 5pc sale. Saudi Arabia, the world’s top crude exporter, recently accelerated plans for the IPO, naming a new chairman for Aramco and mandating 9 banks in top roles. A separate source with knowledge of the deal said Aramco has already carved up the different tasks for banks such as determining valuations, organising roadshows and focusing on certain geographic areas.

“The banks continue to work on it until they are told otherwise. The sense is that they want it done as quick as they can,” the source said. An Aramco pre-IPO meeting with analysts, both local and international, is scheduled for next week at Aramco’s headquarters in Dhahran, two sources, said, with one adding that the meeting would still go ahead.

Aramco was looking to place part of the offering to wealthy Saudi individuals to ensure demand, two other sources familiar with the matter said. Banks including JPMorgan, Morgan Stanley and Goldman Sachs have been appointed to coordinate the deal, which has already faced repeated delays and is crucial for Prince Mohammed’s plans to diversify the Saudi economy in an era of low oil prices.