As the Saudi Arabian Oil Co. pushes ahead with plans for the world’s largest share sale, banks including Goldman Sachs Group Inc. and HSBC Holdings Plc are being asked to pitch for an advisory role on its initial public offering, reported the media quoting people people with knowledge of the matter.
Lenders including Credit Suisse Group AG and Morgan Stanley have also been so-called request for proposals by the company. Aramco, as it’s known, expects to select banks later this year and is targeting the second or third quarter of 2018 for the IPO, sources reportedly said.
Sources said that as potential financial advisers for the IPO, Aramco has also shortlisted New York-based boutique investment bank Moelis & Co. and Evercore Partners Inc. Sources also said that to help it with ensure the IPO’s smooth execution, decide on venues for the listing and select banks to underwrite the offering, Aramco had been seeking a boutique.
To set up the world’s biggest sovereign wealth fund and reduce the economy’s reliance on hydrocarbons, as planned by Deputy Crown Prince Mohammed bin Salman, Saudi Arabia plans to sell less than 5 percent of the company. Dwarfing the $25 billion raised by Chinese internet retailer Alibaba in 2014, the sale’s estimated size of $100 billion would make it the largest ever.
There were already reports in April that already selected to advise Aramco on the IPO are JPMorgan Chase & Co. and Michael Klein, the former Citigroup Inc. investment banker who runs his own advisory firm. While JPMorgan is working on preparations for the IPO and may be among the banks that underwrite the listing, Klein is providing strategic advice to the government.
to make the sale more attractive to investors, Saudi Arabia will reduce the company’s overall tax rate and the company may list on two or three exchanges, Aramco Chief Executive Officer Amin Nasser said.
Since the formation of the country back in 1932, the biggest ever economic shakeup for the country is being planned by Prince Mohammed and at the centre of the plan as envisioned by the prince has the Aramco IPO as the centerpiece. The company would be allowed and its IPO sale would be based on the company maintaining the so-called concession that are critical for the company to gain the rights for the exploitation of the the kingdom’s oil and gas reserves, Nasser has said even though details of what exactly will be sold remain unclear.
There were immediate comments available from Saudi Aramco and Evercore. According to the media, while Goldman Sachs wasn’t immediately available for comment, representatives for Morgan Stanley, HSBC, Credit Suisse and Moelis declined to comment.
(Adapted from Bloomberg)