Saudi Aramco shortlists Hong Kong, London and New York for IPO

15 January 2018
Aramco names the three global stock markets in its shortlist for choosing the foreign location for its stock listing

Saudi Arabia has reportedly shortlisted New York, London and Hong Kong for the overseas stock listing of Saudi Aramco.

It is not yet clear, however, if Riyadh will choose a single stock market, or two or three, from its shortlist for its stated foreign listing of a portion of Aramco’s initial public offering (IPO), according to a Reuters report.

The IPO, a chunk of which will debut on the Saudi Stock Exchange (Tadawul), is set for late 2018, as opposed to the previously announced second quarter of 2018.

The creation of this shortlist implies that Tokyo, Singapore and Toronto are out of the race to lure Aramco to float its shares on an overseas market.

A final decision regarding the launch of what could potentially be the world’s biggest IPO is yet to be made by Saudi Arabia's Crown Prince Mohammed bin Salman, who oversees the kingdom’s economic and oil policies, sources said.

One of the sources said a phased listing was being considered, with the local listing occurring first, followed by an international listing or listings at a later stage.

The second source said it was possible that Aramco would be listed on all three international exchanges, as well as the Saudi bourse, but cautioned that no decision had been reached.

The first source said discussions involved listing on at least two of the three venues.

Saudi officials have left the door open to other options for the Aramco IPO, including listing exclusively on the Tadawul and a domestic listing coupled with a private placement to a strategic investor as a precursor to an international IPO.

China has offered to buy up to 5 per cent of Saudi Aramco directly. Senior industry sources say Riyadh is keen on China, its biggest buyer of oil, becoming a cornerstone investor in the company.

In an interview with MEED, Tadawul CEO Khalid al-Hussain outlined several recent reforms that the Riyadh bourse has undertaken to attract international investment into the kingdom’s companies.

Saudi Arabia has also changed Aramco to a joint stock company as of January 1, in apparent preparation for the IPO, negating speculation that it could be delayed or totally shelved.

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