Saudi Aramco said to seek pitches for IPO roles

Sources say company aims to appoint a group of lenders by early next year
By Bloomberg
Wed 13 Dec 2017 02:41 PM

Saudi Arabian Oil Co is asking banks to pitch for roles as coordinators and bookrunners on its initial public offering, people familiar with the matter said, as the state-owned crude producer pushes ahead with plans for the world’s biggest share sale.

The company sent out the request for proposals to banks over the past few days and aims to appoint a group of lenders by early next year, said the people, asking not to be identified as the information is private. Saudi Aramco, as it’s known, hasn’t told banks where it plans to list the shares, the people said.

Saudi Arabia is seeking to sell as much as 5 percent of Aramco as part of a plan by Crown Prince Mohammed bin Salman to set up the world’s biggest sovereign wealth fund and reduce the economy’s reliance on hydrocarbons. The sale could be the largest ever, based on the government’s $2 trillion valuation of the company.

Aramco is still waiting for a decision on how many shares will be offered to the public and where it will list outside of the kingdom, CEO Amin Nasser said last month.

A spokesman for Aramco declined to comment.

Saudi officials in October reassured investors at a business conference in Riyadh that plans for the Aramco offering were still on track to take place next year, dispelling reports that the process was delayed. People familiar with the situation had said earlier that month that Saudi Arabia was wondering whether to delay the international portion of the offering until at least 2019.

If the company manages to achieve a valuation that matches the Crown Prince’s expectations, the sale would raise about $100 billion, eclipsing the record $25 billion Alibaba Group Holding Ltd. raised in its IPO in 2014.

London and New York exchanges are vying for a role in Aramco’s offering, along with Hong Kong, Singapore, Tokyo and Toronto. The head of the local Tadawul stock exchange also opened the door to a Saudi-only listing in an interview. Khalid Al Hussan said the Tadawul had the “aspiration” to handle the listing alone. He also warned that even if the listing only takes place in Riyadh, the timetable for a sale in 2018 "will be very tight."

Aramco has already been working with advisers including JPMorgan Chase & Co, HSBC Holdings, Morgan Stanley, Moelis & Co and Evercore Partners on preparations for the listing, people familiar have said. Independent Wall Street rainmaker and former Citigroup banker  Michael Klein is also advising the oil ministry on the privatisation.

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