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Wed 20 Dec 2017 04:20 PM

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'All options open' for Saudi Aramco's IPO

Saudi finance minister says plans are 'on track' to list locally and possibly overseas

'All options open' for Saudi Aramco's IPO
(REUTERS/Hamad I Mohammed)

Saudi Aramco’s IPO is moving ahead and all options are open on where to list shares of the giant oil producer, the country’s finance minister said.

The Saudi Arabian Oil Co, the world’s top crude exporter known as Aramco, is “on track” for plans to list shares on the local bourse Tadawul and possibly on foreign exchanges, Finance Minister Mohammed Al-Jadaan said in an interview Tuesday in Riyadh. The state-owned company has previously said the initial public offering is scheduled for next year.

“We are still selecting our options, Tadawul is only one of the options, we are not ruling out any of these at this stage,” Al-Jadaan said. “We are going through a lot of discussions, a lot of assessment, what is the best for the company, because this is not a normal IPO, this is an IPO of the world. We need to make sure that we don’t leave any stone untouched and un-turned to ensure that we are doing what needs to be done to choose the right place.”

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.

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 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. Scenarios of a private share placement or a local listing for Aramco do not achieve the goals initially set by the Saudi authorities, Igor Sechin, chief executive officer for Rosneft PJSC, said in October.

Al-Jadaan was speaking at a ceremony on Tuesday to announce the 2018 state budget which forecast the kingdom’s oil revenue will jump 12 percent next year to 492 billion riyals ($131 billion). Oil is on course for a second annual gain after the Organisation of Petroleum Exporting Countries and its allies agreed to extend production curbs through the end of 2018.

If Aramco 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.

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