Riyadh: Saudi Arabian Oil Co is asking banks to pitch for an advisory role on its initial public offering, three people with knowledge of the matter said, as it pushes ahead with plans for the world’s largest share sale.
The company has sent out the so-called request for proposals to international and boutique investment banks, the people said, asking not to be identified as the process is private.
Aramco, as it’s known, is targeting the second or third quarter of 2018 for the IPO and expects to select banks later this year, two of the people said.
Saudi Arabia plans to sell less than 5 per cent of the company as part of plans by Deputy Crown Prince Mohammad Bin Salman to set up the world’s biggest sovereign wealth fund and reduce the economy’s reliance on hydrocarbons. The sale’s estimated size of $100 billion (Dh367.3 billion would make it the largest ever, dwarfing the $25 billion raised by Chinese internet retailer Alibaba in 2014.
Aramco’s already appointed some advisers, including JPMorgan Chase & Co and Michael Klein, the former Citigroup Inc investment banker who runs his own advisory firm, people familiar with the matter said in April.
Prince Mohammad’s plan envisions the Aramco IPO as the centrepiece of Saudi Arabia’s biggest economic shakeup since the founding of the country in 1932. Although details of what exactly will be sold remain unclear, chief executive Officer Amin Nasser said the IPO will be based on the company maintaining the so-called concession, which gives it the right to exploit the kingdom’s oil and gas reserves.
Saudi Aramco didn’t immediately return calls seeking comment.
