Saudi Aramco considers private share sale instead of IPO

13 October 2017
Report says sale will be with sovereign wealth funds and international investors

Saudi Aramco is considering plans for a private share sale with sovereign wealth funds and international investors instead of an initial public offering (IPO), according to a report by the London-based Financial Times.

The report says that talks about a private share sale have been held with foreign governments -  including China - in recent weeks.

Earlier in October, Saudi Arabia’s Energy Minister Khalid Al Falih said on 5 October that national oil company Saudi Aramco will have its initial public offering (IPO) in the second half of 2018. Al Falih was speaking at an energy forum in Moscow.

Saudi Aramco has yet to select an international venue for the proposed IPO that was first announced in January 2016. New York and London are understood to be the two favoured markets on which to list, in addition to the local Saudi Stock Exhange (Tadawul).

The IPO of up to 5 per cent of Saudi Aramco is an integral part of the kingdom’s ambitious economic reform programme under the Vision 2030 and National Transformation Plan (NTP). If Riyadh’s suggested $2 trillion valuation of Aramco is met, the IPO would raise up to $100bn for the kingdom’s sovereign wealth fund Public Investment Fund (PIF).

In early September there were reports that contingency plans were being prepared for a possible delay to the planned listing. Those reports said that while the government is still planning to proceed with the IPO in the second half of 2018, but is working on contingency plans in case the part-listing is delayed into early 2019.

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