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Page added on November 2, 2019
Saudi Crown Prince Gives Green Light for Aramco IPO
Saudi Crown Prince Mohammed bin Salman finally gave the go-ahead for the initial public offering of Aramco, deciding there’s enough support from local investors for what’s likely to be a record share sale.
The crown prince made the decision at a meeting he chaired on Friday and an official announcement is likely as soon as Sunday, according to people familiar with the matter, who asked not to be named before an official statement.
The partial privatization will be a deal like few others and the biggest change to Saudi oil industry since the company was nationalized in the 1970s. Aramco, which pumps 10% of the world’s oil from giant fields beneath the kingdom’s barren deserts, is the most profitable company globally and the backbone of the kingdom’s economic and social stability.
Mohammed bin Salman
Bloomberg
First suggested by Prince Mohammed in 2016, the IPO was delayed several times as international investors balked at the $2 trillion valuation he placed on the company. An earlier plan to kick off the share sale in mid-October was shelved after bankers received lukewarm interest from money managers, and the deal will likely rely heavily on Saudi money.
It’s not clear if the prince is willing to accept a lower valuation, but he may need to be satisfied with a figure closer to $1.7 trillion, if he wants the deal to go ahead, people have said.
The sale is key to Prince Mohammed’s Vision 2030 plan to overhaul the Saudi economy and end the kingdom’s reliance on oil exports. The proceeds from the IPO will boost the firepower of the OPEC nation’s sovereign wealth fund.
Grabbing a role in the deal has been one of the most hotly contested mandates for global banks. More than 20 are working on the deal, with the top roles going to firms including Citigroup Inc., Goldman Sachs Group Inc., and JPMorgan Chase & Co.
Read a QuickTake on Aramco’s Stop-Start IPO
But the path to today’s decision hasn’t been smooth. After investors pushed back on the Prince Mohammed’s $2 trillion valuation, the original plan to list Aramco in either New York or London was dropped in favor of a Riyadh-only flotation.
To get the deal done, Aramco’s bankers will need hefty contributions from the kingdom’s wealthiest families, many of whom have already been targeted in the 2017’s corruption crackdown that saw scores of rich Saudis detained in Riyadh’s Ritz-Carlton Hotel. Authorities said they raised over $100 billion in settlements from people accused of graft.
Local asset managers, including those looking after government funds, have also been asked to make significant contributions, while domestic banks have been told to lend generously so retail investors can buy Aramco shares, according to people familiar with the situation.
Aramco must also contend with the strengthening global movement against climate change that’s targeted the world’s largest oil and gas companies. Many fund managers are concerned the shift away from the internal combustion engine — a technology that drove a century of steadily rising demand — means consumption of oil will peak in the next two decades.
Aramco could be listed before the end of the year, in which case the world’s most valuable company will no longer be traded in the U.S. but on the Saudi bourse. The exchange lifted restrictions on foreign investors four years ago.
In a bid to make the stock more attractive, Aramco plans to pay $75 billion in dividends next year. That would give investors a yield of 3.75% if the company achieves its ambition of a $2 trillion valuation. That’s a decent payout in a low-interest-rate world, but it’s a lower dividend yield than at other big oil firms.
Investors who buy into the IPO have been guaranteed that the dividend won’t fall until after 2024, regardless of what happens to oil prices. Instead, Aramco will cut back on payouts to the government if it has to reduce the total dividend to less than $75 billion.
19 Comments on "Saudi Crown Prince Gives Green Light for Aramco IPO"
CAM on Sat, 2nd Nov 2019 8:28 am
So, the entire deal is based on the word of MBS. I guess his word is at least as good as Trump’s. Looks like he will once again be shaking down the Saudi royalty. Don’t think I will be investing!
Duncan Idaho on Sat, 2nd Nov 2019 12:16 pm
I guess his word is at least as good as Trump’s.
Good point!
The Fat Boy and the Clown Prince seem to get along.
Robert Inget on Sat, 2nd Nov 2019 2:04 pm
I know, it’s OT:
https://www.dailymail.co.uk/news/article-7642387/Smugglers-Mexico-SAWING-sections-Trumps-virtually-impenetrable-border-wall.html
Mexicans just sawed through Trump’s Wall.
https://www.amazon.com/s?k=Portable+hack+saw&ref=nb_sb_noss_2
Robert Inget on Sat, 2nd Nov 2019 2:11 pm
MBS simply strung-up 300 Royals by their toes.
It’s amazing how well this works to convince folks to buy into peaked out Saudi Oil reserves.
Saudis can’t open on US markets because they can’t stand ANY scrutiny.
Dredd on Sat, 2nd Nov 2019 2:25 pm
(It’s About The Oil Stupid)
Robert Inget on Sat, 2nd Nov 2019 4:58 pm
My o My Dredd.
First of ALL, everything today is about oil.
EVERYTHING. Mexico is where it is today, a broken, almost failed state for its corrupt dependency on exported oil.
Now, the US is said to be ‘energy independent’
One simple question Dredd, did you make more money in energy under Obama or Trump?
TRUMP’S WALL started out as a sort of tease.
Now, it’s a joke.
full woke supremacist muzzies jerk maximum newspeak double rainbow all the way across the sky so intense whoa it looks like a triple rainbow on Sat, 2nd Nov 2019 7:17 pm
Dredd on Sat, 2nd Nov 2019 2:25 pm
supertard, muzzie lovin’ and libtarding must be intense, exhausting.
JuanP garbage on Sat, 2nd Nov 2019 7:28 pm
We are full stupid today:
full woke supremacist muzzies jerk maximum newspeak double rainbow all the way across the sky so intense whoa it looks like a triple rainbow said Dredd on Sat, 2nd Nov 2019 2:25 pm supertard, muzz…
full woke supremacist muzzies jerk maximum newspeak double rainbow all the way so intense whoa it looks like a triple rainbow said Chung I appoint you supertard. Muzzie baghdadi is…
full woke supremacist muzzies jerk maximum newspeak double rainbow all the way across the sky so intense whoa it looks like a triple rainbow on Sat, 2nd Nov 2019 8:24 pm
muzzie killed blowing himself up chased by dog. “the black dog is devil”
watch all muzzies carefully, your life may be in danger. we need a people’s trail of global muzzies, when convicted, no need to watch but just go have fun.
Anonymouse on Sat, 2nd Nov 2019 8:53 pm
muzzie = Davytards replacement sock for:
I AM THE DAVYTARD
So FU expcettionalturd.
Davy on Sat, 2nd Nov 2019 9:31 pm
For anyone that cares, I going beddy byes now. Everyone that appears in my dreams and nightmares are JuanP. All of them!
dumbasses
full woke supremacist muzzies jerk maximum newspeak double rainbow all the way across the sky so intense whoa it looks like a triple rainbow on Sat, 2nd Nov 2019 9:54 pm
dear supertard, thanks for working on my project, it’s no longer active and funded. as Q level you know everything going on.
thank you for helping getting nixon to china. we need to make peace so we can get people’s trial of global muzzies started. once convicted, it’s open season on muzzies. the average tom is confused and unguided in the use of luke or anything else when it comes to muzzies. once convicted, elimination of muzzies will be radically democratized like how muzzie qutb radically democratized the words of allah the pedifile and started all the killings by muzzies of infidels? we need to level the playing field and we constantly remind everyone to ignore muzzies tard like the borgs and focus on the muzzies leadership only. of course we’d get back to run the mill muzzies later.
there are so many muzzies and muzzies lover on here. the muzzie lovin’ is part of muzzie plan, to wear down infidels and force love of muzzies on infidels. france is a good example…it’s time they give up kinetic ability and up jizya payments.
makati1 on Sat, 2nd Nov 2019 10:02 pm
Of course, Islam is the fastest growing religion in the world today. And is likely the largest number of practicing what they believe. Soon, they will dominate. Adjust people. Their only fault is not allowing anyone to leave.
JuanP ID theft and sock garbage on Sun, 3rd Nov 2019 3:53 am
Full stupid last night…OH and annoymouse joined in.
Davy Sock said print baby print on Sun, 3rd Nov 2019 1:35 am
full woke supremacist muzzies jerk maximum newspeak double rainbow all the way across the sky so intense whoa it looks like a triple rainbow said dear supertard, thanks for working on my project,…
Davy said For anyone that cares, I going beddy byes now. Eve…
Anonymouse said muzzie = Davytards replacement sock for: I AM THE…
full woke supremacist muzzies jerk maximum newspeak double rainbow all the way across the sky so intense whoa it looks like a triple rainbow said muzzie killed blowing himself up chased by dog. &#…
Where is stupid? on Sun, 3rd Nov 2019 4:52 am
probably passed out from a hard night of drinking and drugging
Anybody heard from stupid? on Sun, 3rd Nov 2019 5:56 am
probably very depressed and crying.
Sissyfuss on Sun, 3rd Nov 2019 8:15 am
The Sauds IPO has become an equivalency of cold fusion. Always approaching, never arriving.
Stupid you up?? on Sun, 3rd Nov 2019 9:01 am
We miss laughing at your insanity
Davy on Sun, 3rd Nov 2019 9:07 pm
“We miss laughing at your insanity”
BTW Stupid. ‘We’ are my multiple personality disorders. In case you were wundering.