Saudi market regulator green lights Aramco IPO

Saudi Arabia’s Capital Market Authority (CMA), the Kingdom’s market regulator, said on Sunday that it issued a resolution approving Saudi Aramco’s IPO.

The CMA’s approval on the application will be valid for 6 months from the CMA Board resolution date, the regulator said in a statement.

“The CMA’s approval on the application should never be considered as a recommendation to subscribe in the offering of any specific company,” the regulator added.

Saudi Aramco is aiming to list a total of 5 percent to raise $100 billion at a $2 trillion valuation. The company is expected to list a 1 percent stake on Tadawul before 2019 end and another 1 percent in 2020, which will be followed up by an international offering in 2020 or 2021.

The company will list on the Saudi Stock Exchange on December 11, Al Arabiya sources confirmed last week.

Pricing will start on November 17 with a final price for the float expected to be announced on December 4, the sources said.

The proceeds of the Aramco IPO will go to Saudi Arabia’s sovereign wealth fund and will be used to accelerate the Vision 2030 program, a comprehensive plan to diversify the Kingdom’s economy and reduce its reliance on oil exports.

The company, which plans to pay a base dividend of $75 billion in 2020, reported a profit of $111.1 billion in 2018 and $46.9 billion in the first half of 2019. It is the most profitable company in the world, ahead of Apple Inc.

Earlier this year, Saudi Aramco said it would buy a 70 percent stake in Saudi Basic Industries Corp (SABIC), the Kingdom’s largest petrochemicals producer, to boost its downstream and chemicals businesses.

Attacks on two key oil installations in Saudi Arabia in September knocked off five percent of the global crude supply, which has since been restored by the world’s largest oil exporter.

“I want to move on… we in the energy industry in Saudi Arabia, we have got a few challenges, we have got an IPO and we want to make sure it’s a successful IPO,” the Kingdom’s Energy Minister Prince Abdulaziz said at the Russia Energy week last month.