Saudi Arabia’s market regulator has approved Saudi Aramco’s application to list on the domestic stock market as the kingdom seeks to diversify and create the world’s most valuable listed company.
The Capital Market Authority said in a statement issued on its website on Sunday that its board “has issued its resolution approving the Saudi Arabian Oil Company [Saudi Aramco] … application for the registration and offering of part of its shares”.
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It did not immediately offer any timeline for the initial public offering (IPO) of the world’s most profitable company.
The Saudi-owned satellite channel Al-Arabiya reported last week, citing anonymous sources, that pricing for the stock will begin November 17.
A final price for the stock will be set December 4, with shares then beginning to be traded on Riyadh’s Tadawul stock exchange on December 11, the channel reported.
Cash for reforms
The confirmation of the share sale in Saudi Arabian Oil Co, or Aramco as the oil giant is usually known, came about seven weeks after crippling attacks on its oil facilities, underlining Saudi Arabia’s determination to push on with the listing regardless.
The IPO is designed to boost Crown Prince Mohammed bin Salman’s economic reform agenda by raising billions to diversify the kingdom, whose dependency on oil was highlighted by the production effect of the September 14 attacks.
The kingdom hopes for a $2 trillion valuation for the firm, in order to raise about $100bn for development programmes.
The valuation may be lower, however, as bankers and company insiders say Aramco’s value is closer to $1.5 trillion.
At that price, Aramco would still be worth at least 50 percent more than the world’s most valuable companies, Microsoft and Apple, which each have a market capitalisation of around $1 trillion.
Riyadh is looking to list a 1-2 percent stake on the Saudi stock market to raise at least $20bn-$40bn. Prince Mohammed wants to eventually list a total of five percent of the company.
An international sale is expected to follow the domestic IPO.