As the date slated for the Initial Public Offering (IPO) of global energy giant Saudi Aramco nears, there are reports that the Saudi authorities are on a whirlwind tour of regional capitals to attract institutional investors for the offering on 4 December.
Media reports say that Aramco’s CEO Amin Nasser was recently in Kuwait to hold talks with officials of Kuwait Investment Authority, the country’s sovereign wealth fund manager, to convince them to invest in the IPO. Talks have also apparently been held with other sovereign investors, including the Abu Dhabi Investment Authority, Singapore’s GIC and other funds.
The long-awaited debut trading is set to take place domestically on Tadawul, the Riyadh stock market, on December 11. The IPO is said to target local and regional investors, but so far it has failed to attract an anchor investor. The authorities have also canceled marketing roadshows for its listing outside of the Gulf, reportedly because of the lack of interest from foreign institutional investors.
A second offering on the international market is said to be planned, but no details are as yet available. Any plans for an international IPO would very likely depend on the outcome of the domestic sale.
The IPO in 1.5 percent of Aramco is expected to be the world’s largest and could raise as much as US$25 billion. However, an expected valuation of $1. 65 trillion this is well below the $2 trillion valuation target sought by Crown Prince Mohammed bin Salman. The prince, who is the architect behind the deal, sees the IPOt as central to his Vision 2030 plans that aims to diversify the Saudi economy away from its over-reliance on hydrocarbon revenues and open up the country to foreign investments
