Saudi oil giant hires HSBC to advise on initial public offering of $10bn joint venture with Japan's Sumitomo.
State-owned Saudi Aramco and Japan's Sumitomo Chemical said on Tuesday they hired HSBC Holdings to advise on an initial public offering (IPO) of a $10 billion joint venture in January.
The IPO of Rabigh Refining and Petrochemical (Petro Rabigh), which will start on January 5, will be the first by any affiliate of Saudi Aramco, the world's largest oil company by output, and possibly Saudi Arabia's second-biggest share sale to the public.
The sale will be "one of the largest IPOs in the history of the Gulf, and one that has been designed to provide the maximum opportunity for Saudi retail investors," Tim Gray, HSBC's Chief Executive in Saudi Arabia was quoted as saying in a statement from the joint venture.
The statement valued Petro Rabigh at $10 billion.
Saudi Arabia's market regulator, the Capital Market Authority (CMA), said on Monday it had approved a Petro Rabigh application to sell 219 million shares, equivalent to 25% of the company.
The sale closes on January 12. Saudi Aramco and Sumitomo Chemical each own 50% of the project, which involves building on an existing 400,000 barrel per day (bpd) oil refinery at Rabigh, on Saudi Arabia's Red Sea coast, and expanding its capacity and products to include chemicals such as ethylene.
The initial construction cost of the project, which will be completed by October next year, was put at $4.3 billion in 2005.
The expanded complex will produce 18.4 million tonnes of oil products, 1.3 million tonnes of ethylene and 900,000 tonnes of propylene a year.