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On Sunday, Saudi Arabia revealed the value of world's biggest IPO. Aramco's IPO will be of up to $1.71 trillion and it will sell 1.5% of the company through this. But the IPO has missed Crown Prince's initial target of $2 trillion. The energy giant has already started taking bids from the investors in a price range of 30-32 Saudi riyals.
Saudi's energy giant, Saudi Aramco has its IPO next month ahead of which climate change and decline in the demand for fossil fuels are seen as key risks. "Climate change concerns and impacts could reduce global demand for hydrocarbons and hydrocarbon-based products and could cause the company to incur costs or invest additional capital," says Aramco. The largest supplier of hydrocarbons will reveal the price of its shares on Sunday.
According to the sources, China is planning to invest $5 billion to $10 billion in the oil giant Aramco's planned IPO. State-owned oil producer Sinopec and sovereign wealth fund China Investment Corp are among the parties who have been discussing to buy stock in the offering. But the lineup of investors and investment size will finally depend on the Chinese government.
Saudi Aramco has started its Initial Public Offering (IPO). Aramco has also shared a few specifics on the number of shares to be sold, pricing or the date for a launch. The company could offer 1%-2% of its shares on the local bourse. Its Chairman said, "Today is the right opportunity for new investors to reap the benefits of Aramco’s ability to achieve value, and boost it on the long-term”.
Saudi Aramco is planning to restart its mega IPO. But the plan will still face some hurdle, the major one being achieving the $2 trillion valuations. Meanwhile, Saudi Crown Prince wants Aramco to be listed in New York and insisted that the IPO takes place in 2020 or 2021. It was in 2016 that the IPO project was announced for the first time as a part of the Vision 2030.
In a statement released yesterday, state-owned Saudi Aramco informed about launching a domestic fuel retailing subsidiary, Saudi Aramco Retail Co, in order to expand into downstream businesses. Through the newly established entity, the oil major aims to create a network of filling stations within Saudi. While plans of making an IPO were halted this year, the new retail subsidiary could help Riyadh to go ahead with an IPO in Aramco.
Saudi Aramco has been awarded a 40-year franchise by Saudi Arabia to explore and exploit the hydrocarbon reserves of the kingdom. Although Saudi Aramco has put IPO on hold, Saudi’s oil minister commented that the kingdom is “committed to the IPO of Saudi Aramco at a time of its own choosing when conditions are optimum.” The concession also includes 20-year extension option.
According to sources, Saudi Arabian Oil Co. has shifted its focus to buying the strategic stakes in Saudi Basic Industries Corp., a chemical giant, while keeping its IPO on hold. Furthermore, Aramco has written to some of its advisors asking them to suspend the work for now. In January 2016, the IPO process started after the crown prince announced that Riyadh wants to sell its shares in Aramco
Al Falih, Minister of Energy, Industry and Mineral Resources of Saudi Arabia has informed that the postponement of Saudi Aramco’s initial public offering (IPO) is “most likely”. The minister told reporters that, “we’re simply waiting for a market readiness for the IPO”