Published: Mon, November 04, 2019
Markets | By Otis Pena

Saudi Aramco listing leaves analysts with many questions, wide-ranging valuations

Saudi Aramco listing leaves analysts with many questions, wide-ranging valuations

While Aramco did not specify the time frame or how much of the total company it would be selling, according to verified sources, the company could possibly offer 1-2 percent of its shares on the regional bourse, raising somewhere between $20 billion - $40 billion in the process.

"For us, as Saudi Aramco, I think we are proud of the listing of Aramco".

On Sunday, the long-awaited IPO announcement failed to spur the Riyadh market, which closed nearly 2.0 percent lower.

The company is responsible for 13% of the world's oil, and this year it revealed half-year profits of $46.9 billion - more than the next six biggest oil companies combined.

The Saudi government valued Aramco at $2 trillion, but independent analysts are putting wider guesses, Reuters reports.

Explorers from the Rockefeller family's Standard Oil Company struck oil in Saudi Arabia in 1938. The original goal was a $2 trillion valuation but the kingdom settled for the current value.

Mr Al Rumayyan also said a foreign listing had been put on hold, a move likely to disappoint investment bankers hoping to benefit from marketing the shares.

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Prince Mohammad first proposed to take Aramco public in 2016, but the IPO kept getting delayed over the years.

Having a large domestic investor base is expected to make it easier to achieve a higher valuation. It has already announced plans to pay $75 billion in dividends next year.

Saudi Aramco's blockbuster listing remained shrouded in mystery on Monday, a day after the company finally announced its plans, with scant details disclosed and expert valuations varying wildly from around $1.2 to $2.3 trillion.

Two bankers working on the deal estimated around 80% of shares would be sold to local retail and institutional investors, with about 20% likely to go to global buyers.

Aramco's net income previous year of $111 billion made it the most profitable of any corporation - more than Apple Inc., Google's parent Alphabet Inc. and Exxon Mobil Corp. combined - but the company has pledged to pay a minimum of $75 billion in dividends, leaving it vulnerable to a downturn in oil prices.

Aramco said it did not expect the September 14 attacks on its facilities, which initially halved its production, would have a material impact on its business.

Twenty seven banks, including Citigroup Inc (NYSE: C), Goldman Sachs Group Inc (NYSE: GS), HSBC Holdings plc (LON: HSBA), JPMorgan Chase & Co.

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