Tags: saudi | aramco | ipo | banks

Saudi Aramco Likely to Give IPO Roles to Citi, Goldman, HSBC

Saudi Aramco Likely to Give IPO Roles to Citi, Goldman, HSBC
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Monday, 09 September 2019 08:17 AM

Saudi Aramco is expected to give lead roles to JPMorgan, Morgan Stanley and National Commercial Bank for its planned initial public offering (IPO), a source familiar with the transaction said.

It will also likely add Citi, Goldman Sachs, HSBC and Samba Financial Bank to the list of banks managing the transaction, a first phase of which could take place locally before the end of this year, said the same source and two other sources familiar with the matter.

Saudi Energy Minister Prince Abdulaziz bin Salman said on Monday the kingdom was aiming for the Aramco IPO "as soon as possible," speaking on the issue for the first time since replacing Khalid al-Falih at the ministry.

Aramco is preparing to sell up to a 5% stake by 2020-2021, in what could be the world's biggest IPO. It is still meeting banks pitching for roles on the deal, and is expected to appoint the advisers in the coming days, two of the sources said.

Morgan Stanley, JPMorgan and HSBC were chosen to play a leading role in the transaction before the process was halted last year.

Goldman Sachs, HSBC, and JPMorgan declined to comment.

Aramco declined to comment to a separate Reuters request on the likely appointment of JPMorgan, and did not comment on a subsequent request on the likely roles of the other banks.

Citi, Samba, Morgan Stanley and National Commercial Bank did not immediately respond to requests for comment.

The IPO is a centerpiece of Saudi Arabia's economic transformation drive to attract foreign investment and diversify away from oil.

The kingdom is gearing up to fast-track a local listing of Aramco by bringing in the head of Saudi Arabia's sovereign wealth fund, Yassir al-Rumayyan, who was recently named new chairman of the state oil giant and leads an executive committee overseeing plans to float shares in Aramco.

Should Aramco proceed with a local listing this year, international banks on the deal would be tasked with promoting the company to international investors looking to buy its shares on the Saudi main exchange, Tadawul.

It is not clear yet on which international exchange Aramco would list, but sources have told Reuters the board had determined that listing in New York would carry too many legal risks to make it a realistic option.

Aramco raised $12 billion this year in its first international bond issue, obtaining over $100 billion in demand.

Many saw that deal as a relationship-building exercise with international investors before its IPO, which has faced repeated delays.

The debt sale was expected to help fund Aramco's $69.1 billion acquisition of a 70% stake in petrochemicals firm Saudi Basic Industries Corp (SABIC) from the Saudi sovereign wealth fund, a deal that many saw as a transfer of government funds aimed at boosting the Saudi Crown Prince's economic agenda.

© 2019 Thomson/Reuters. All rights reserved.

   
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Saudi Aramco is expected to give lead roles to JPMorgan, Morgan Stanley and National Commercial Bank for its planned initial public offering (IPO), a source familiar with the transaction said.
saudi, aramco, ipo, banks
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2019-17-09
Monday, 09 September 2019 08:17 AM
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