Oil giant Aramco IPO to happen early 2021: Saudi crown prince

Saudi Arabia’s crown prince says the stock market debut for the kingdom’s oil giant Aramco will go forward by early 2021.

Saudi king in waiting Mohammed bin Salman gave the update for the initial public offering in an interview with Bloomberg one month after Reuters reported that Saudi Arabia had scrapped plans to list shares in the company. Saudi Arabia Energy Minister Khalid al-Falih disputed that report, saying the kingdom would take Aramco public when the time is right.

That time now appears to be roughly two years from now, according to the crown prince, who is often referred to as MBS. The royal also reiterated his view that Aramco is worth $2 trillion, though analysts have said a $1 trillion to $1.5 trillion valuation is more likely.

“I believe late 2020, early 2021,” MBS told Bloomberg. “The investor will decide the price on the day. I believe it will be above $2 trillion. Because it will be huge.”

The kingdom was originally targeting 2018 for the IPO, but Falih said earlier this year 2019 looked more likely.

Saudi Aramco CEO Amin Nasser told CNBC last month that the IPO would be delayed indefinitely by the company’s bid to purchase a majority stake in petrochemicals company Saudi Basic Industries Corporation, or SABIC.

Despite the delay, Nasser said the government remained committed to taking a portion of Aramco public.

Aramco did not immediately have a response to the comments by MBS on the IPO.

MBS first announced plans to list shares of Aramco in 2016. The IPO is at the center of Vision 2030, the crown prince’s ambitious effort to diversify Saudi Arabia’s economy and reduce its reliance on the oil sector.

The plan was for revenues from the IPO — projected at about $100 billion — to flow into the nation’s Public Investment Fund. MBS told Bloomberg that is still the plan, and that the PIF would also get a $70 million windfall by selling Aramco its 70 percent stake in SABIC.

MBS said he expects the SABIC deal to close in 2019, after which Aramco will wait one financial year to launch the IPO.

Source: CNBC