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Tue 12 Nov 2019 09:10 AM

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Saudi Aramco IPO: Everything you need to know

Saudi Aramco will allow investors to start bidding for shares in the world's most-profitable company from November 17.

What do we know so far?

Targeted percentage of shares allocated to individual investors will be up to 0.5% of shares.

Saudi citizens, GCC nationals and foreign institutional investors can participate in the IPO.

There’s also going to be share-incentive plan for employees.

Institutional book-building period is from Nov 17 - Dec 4 and retail subscription period is from Nov 17 - Nov 28.

Now, Saudi Aramco reported a net profit of $46.9 billion (Dh172.3bn) for the first half of 2019, higher than that of Apple, Google and Amazon. The company's and their revenue for the first half was an impressive $163.9bn.

Price guidance for the share sale is expected next week, but people familiar with the deal have told Bloomberg that Crown Prince Mohammed bin Salman would be satisfied with a valuation of between $1.6 trillion and $1.8 trillion.

Analysts from 16 banks have offered a valuation on the company, ranging in estimates from $1.1 trillion at the bottom right up to $2.5 trillion.

MBS had proposed the offering in 2016 as a way to expose the state-owned firm to the rigors of the market and raise money for the sovereign wealth fund.

The richest Saudis are being pressed to commit large sums to the IPO. Among those considering sizable purchases are the Olayan family and Prince Alwaleed bin Talal, the billionaire investor who was held for several weeks in Riyadh’s Ritz-Carlton Hotel during 2017’s declared corruption crackdown.

China, the world’s largest oil importer, may commit as much as $10 billion through sovereign wealth funds and other state-owned enterprises.

Not sure if you read this in ArabianBusiness.com, but Aramco's CEO Amin Nasser had said that You're basically a rock star if you work for Saudi Aramco.

Last year, top management and board members — about 17 people in total — split roughly $30 million worth of compensation and benefits.

CEO Amin Nasser collected no more than a $5 million package in 2016 as the company began preparing its protracted initial public offering.

Working at Aramco, for example, comes with many benefits beyond salaries. Jobs at the company are highly coveted among Saudis. Top candidates are sometimes recruited as early as their teens. A job offer can be a ticket to a university education in the US, career-long job security and immense prestige back home.

Things get even better for those who make it to the senior ranks. Current and former executives, and their families, mainly live in Ar-Rabiyah, an enclave in northern Dhahran that’s filled with opulent mansions with pools.

They enjoy a wide range of services and benefits paid for by Aramco, like cars and drivers, gardening and housekeeping, people familiar with the matter said. Contracts for senior executives also include health insurance for the person’s wife, or wives, one of the people said.

(Source: Arabianbusiness.com YouTube channel)