Daily Management Review

Aramco IPO Launch Will Take Place In Early 2021: Saudi Crown Prince


10/09/2018




The initial public offering of the government owned Saudi Aramco would hit the markets as early as early 2021, according to the king in waiting of Saudi Arabia.
 
This announcement, which the market has been waiting to hear from a believable source, was made during an interview with the business news channel Bloomberg by Crown Prince Mohammed bin Salman of Saudi Arabia. There were reports earlier in the media that the plan by the authorities of Saudi Arabia had scrapped the plans of launching the IPO. The reports were however disputed by Saudi Arabia Energy Minister Khalid al-Falih and gad added that the authorities would issue the anticipated IPO at an appropriate time.
 
Now, according to the crown prince, that time apparently is about two years away. It should be mentioned that the crown price is often referred to as MBS – a short form for his name. In the interview, the prince also stressed his earlier statements about the valuation of Saudi Aramco being about $2 trillion. Analysts however have worked out the valuation of the oil giant somewhere between $1 trillion and $1.5 trillion.
 
"I believe late 2020, early 2021," MBS told Bloomberg. "The investor will decide the price on the day. I believe it will be above $2 trillion. Because it will be huge."
 
When the IPO was initially planned, the authorities had maintained a date of 2018 for the launch of the IPO. However later, Falih said that the mire likely date was of 2019.
 
And last month, Saudi Aramco CEO Amin Nasser said in a television interview last month that the plans of the launch of the IPO would be postponed indefinitely because Saudi Aramco is attempting to acquire a majority stake in petrochemicals company Saudi Basic Industries Corporation, or SABIC.
 
But the Saudi government is very committed to launch the IPO for Aramco despite the delay, said Nasser.
 
There were no comments from Aramco about the comments of MBS about the IPO. 
 
The plan of the crown prince and the Saudi Arabian authorities about putting up a part of Aramco, which was announced first in 2016, for the public forms the core of a wider plan of the government called Vision 2030, which is an ambitious plan of the kingdom to diversify its economy and drive it way from its over dependence on oil.
 
The Saudi government anticipates that the IPO would fetch an amount of about $100 billion which would be injected into the Public Investment Fund of the country. MBS also confirmed that the kingdom still persists with this plan and added that the sale of its 70 percent stake in SABIC to Aramco would also fetch it an additional $70 million. The price also added that the for the launch of IPO would, the government would wait for a year after the completion of the deal with SABIC - which is expected to end in 2019.
 
(Source:www.cnbc.com)






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