Saudi Arabia’s state-owned oil giant, Saudi Aramco, could make its’ first listing in Saudi Arabia and privately distribute shares to large investors before internationally listing the company.
This is one idea under consideration for, potentially, the world’s largest listing, as this could simplify the process for the recapitalization of the company, which is a key in Vision 2030.
The government aim to raise $100 billion from the 5 percent listing of the company, however, the valuation of the company is still uncertain. Additionally, the timing of the listing is uncertain and 2019 is becoming more likely for when the IPO will be officially released.
“A range of options, for the public listing of Saudi Aramco, continue to be held under active review. No decision has been made and the IPO process remains on track,” said a Saudi Aramco official.
Aramco says they are ready to go ahead with the listing but are waiting for confirmation from the government. Officials also said, the Saudi stock exchange, Tadawul, would be the anchor market for the IPO.
One factor supporting a local listing is the anticipated awards in June for emerging market status for Saudi Arabia by index firm MSCI. If won, this could bring a large amount of foreign capital into the Kingdom as global fund managers add Saudi Arabia to their holdings.
“It makes sense for them to list on the Saudi stock exchange, even if this is the first listing that we have,” said John Sfakianikis, director of economic research at the Gulf Research Center.
A local stock sale would avoid strict disclosures required by bigger markets such as the New York and London stock exchange. However, both of these and the Hong Kong stock exchange would allow for easier liquidation than Tadawul.
A source close to the IPO said that they are intent on listing locally and internationally. “They are absolutely intent on doing this internationally,” the source said.