The mandates have been heavily demanded by the world’s largest investment banks for a transaction which, according to initial plans by Saudi Crown Prince Mohamed bin Salman, could generate about $ 100 billion for Saudi state coffers.
Saudi Aramco has hired nine banks as joint global co-ordinators to lead its planned initial public offering, projected to be the largest in the world, two sources familiar with the matter told Reuters on Wednesday.
The Kingdom plans to list 1% of the state-owned oil giant – the world’s largest oil company – on the Riyadh Stock Exchange before the end of this year and another 1% in 2020, sources told Reuters this week as initial steps forward an audience selling about 5% of Aramco.
Aramco has selected JPMorgan, Morgan Stanley and the National Commercial Bank of Saudi Arabia, which were previously working to sell the stock before it was banned last year, sources said, refusing to identify you because of trading sensitivities.
JPMorgan, Bank of America, Credit Suisse and HSBC declined to comment. Aramco and the remaining banks did not immediately respond to a request for comment.
The IPO plan has gained momentum in recent days with the appointment of the head of the kingdom’s sovereign wealth PIF fund, Yasser al-Rumayyan, as the new chairman of Aramco.
Rumayyan, a close ally of Prince Mohamed, took over former Energy Minister Khalid al-Falih in a move to separate Aramco from the ministry, a move Saudi officials have said was important to clear the way for the IPO.
Bankers have been judging Saudi Arabia to secure roles in the transaction, which has faced repeated delays but which officials have said will happen by 2020-2021.
Aramco chief executive Amin Nasser said this week that the country’s IPO would be the “main” listing but that the company was also ready for an international stock sale. He said the final decision on the place and timing rested with the government.
Flotation is central to Prince Mohamed’s plans to diversify the Saudi economy in an era of low oil prices.
Based on the $ 2 trillion valuation shown that Saudi Aramco had hoped to achieve, a 1% mark would capture $ 20 billion, a huge milestone for the local stock market.
Analysts and bankers, however, have said that $ 1.5 trillion is a more accessible valuation for Aramco.
Aramco raised $ 12 billion this year in its first international bond, gaining more than $ 100 billion in demand, in a deal many saw as a pre-IPO relationship exercise for building relationships with international investors./Investing.com