2 Trillion Ipo Saudi Arabia

2 trillion ipo saudi arabia

2 trillion ipo saudi arabia

The world’s most profitable company has started its initial public offering as Saudi Arabia attempts to reduce its reliance on oil.

Saudi Aramco &#x; the kingdom&#x;s state oil company which processes 10 per cent of the world&#x;s oil &#x; revealed this weekend it planned to list shares on the local stock exchange in capital city Riyadh within weeks.

The IPO process officially kicked off yesterday after the kingdom lodged an intention to float document.

While details regarding precise dates and price range remain scant, sources expect between 1 and 2 per cent of its shares will be made available, which could be the world&#x;s biggest listing.

According to Reuters, that could raise up to $US40 billion ($A58 billion), which would smash the previous $US25 billion record made by e-commerce behemoth Alibaba in

All profits will be added to the country&#x;s sovereign wealth fund as Crown Prince Mohammed bin Salman attempts to reform the country&#x;s economy and diversify away from oil.

Non-energy industries are now on Saudi Arabia&#x;s agenda, as are a number of megaprojects and also tourism, with new tourist visas launched in September for first time in the kingdom&#x;s history.

At a news conference held yesterday in Dhahran in Saudi Arabia&#x;s east, Aramco chairman Yasir al-Rumayyan said the company would spend the next week or so speaking with investors to gauge their interest, with a price range and details of the exact number of shares to be sold to follow.

Today marks a significant milestone in the history of the company and important progress towards delivering Saudi Vision , the kingdom&#x;s blueprint for sustained economic diversification and growth, Mr al-Rumayyan said, according to AFP.

For the (international) listing part, we will let you know in due course, Mr al-Rumayyan said, in reference to previous reports of an international sale as well as a local one.

So far it&#x;s only on Tadawul.

Representatives from the company described the move &#x; which is being watched closely by markets around the world &#x; as a historic milestone.

While Crown Prince Mohammed bin Salman famously claimed the company had a $US2 trillion valuation several years ago, Bloomberg reports it could be worth as little as $ trillion or even less .

At the moment, it seems the sale will be restricted to the local stock exchange, the Tadawul All Share Index, which dropped by up to per cent after the news was announced.

David Hunter, director of market studies at Schneider Electric, said Riyadh was trying to reduce the country&#x;s reliance on oil and would invest money in solar power.

It&#x;s essentially the world&#x;s largest unquoted company; it&#x;s a massive global oil producer.

This is the absolute mother of all oil and gas companies, he told the BBC.

Saudi Arabia has the second-biggest oil reserves after Venezuela, according to the Energy Information Administration.

WHAT IS ARAMCO?

In , Saudi Arabia and the Standard Oil Company of California &#x; later Chevron &#x; struck a deal to form a new company to survey and drill for oil, the BBC reports.

At some point during the s, the kingdom purchased the entire firm.

Last year, the company&#x;s net profit of $ billion was higher than that of Apple, Google and Exxon Mobil combined.

Recently it has begun publishing financial results and giving access to international journalists.

The company has been in the spotlight after multiple delays in its bid to launch an IPO.

It also made international headlines when drones knocked out half of Saudi Arabia&#x;s oil production capacity in the Abqaiq&#x;Khurais attack.

The attack was claimed by Houthi rebels in Yemen &#x; where Riyadh has been involved in the country&#x;s brutal Civil War &#x; but the Saudis blamed Iran.

HUMAN RIGHTS

The kingdom has come under intense scrutiny over its human rights record, especially after the much-publicised murder of journalist Jamal Khashoggi and a crackdown on women&#x;s rights activists.

A UN inquiry found the murder was premeditated by officials from Saudi Arabia, and called for the urgent attention of the world.

In October Prince Mohammed bin Salman was asked point-blank by CBS program 60 Minutes if he ordered the killing and dismemberment of Khashoggi.

Absolutely not.

Expecting Saudi Aramco to hit $2 trillion valuation: Energy expert

This was a heinous crime, he answered.

But I take full responsibility as a leader in Saudi Arabia, especially since it was committed by individuals working for the Saudi government, he said.

&#x; with wires