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JP Morgan Close to Lead Aramco IPO, Despite Leadership Changes, Drone Attack
Traders Magazine Online News, September 30, 2019
The delayed Saudi Oil Giant Aramco’s Initial Public offering may finally be coming to the market with JP Morgan talked as the lead bookrunner.
According to CNBC, J.P. Morgan Chase is close to winning the lead advisory role for the initial public offering of Saudi Aramco, according to people familiar with the situation. A final decision is expected soon and could still change, the people said.
The oil company could sell upwards of $25 billion worth of shares domestically on the Tadawul Exchange and then globally in New York and London afterwards.
An IPO was delayed last year by Mohammad bin Salman, as Saudi Aramco pursued a $69 billion takeover of a Saudi chemical producer. At the time, Saudi officials said that they wanted to raise $100 billion by selling a 5% stake in Saudi Aramco, valuing the company at $2 trillion. That would far outstrip the $25 billion raised in the 2014 IPO of Chinese e-commerce company Alibaba.
Now, encouraged by the strong reception to a $12 billion bond offering in April, MBS is keen to push ahead with a listing as early as November, according to the people, CNBC added.
But the latest attack on the refiner where drones, believed to have originated from Iran or Syria, damaged production facilities and forced a 50% cut in production might cause a delay in the IPO until the end of the year. Reuters just reported that Aramco has secured some support from native sovereign wealth funds that could boost the IPO’s valuation to over $2 trillion.
Also, the firm just named Yasir Othman al-Rumayyan, governor of the kingdom's Public Investment Fund, to head the company, replacing Energy Minister Khalid al-Falih. The change has been widely viewed as an effort to speed up preparations for the oil giant's planned initial public offering.
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