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Aramco IPO: Saudi Aramco board off to China to meet with potential investors

Aramco IPO

Saudi Aramco’s board of directors is expected to meet in Shanghai on May 10 to discuss the company’s business as well as the Aramco IPO. AFP/Getty Images photo.

Aramco IPO could generate $100 billion

Industry sources say Saudi Aramco’s board of directors will be traveling to China next month as part of the company’s effort to entice Chinese and Asian investors to take part in the Aramco IPO.

According to a Reuters report, the board of directors will meet in Shanghai on May 10 to discuss the oil major’s business plans, investments as well as preparations for the IPO which will see Saudi Aramco sell up to 5 per cent of the company in 2018.

The board of directors usually meets twice a year, often abroad and has only met once before in China, back in 2010.  Saudi Aramco has appointed international banks with access to Chinese investors to advise on the IPO.

Initial estimates say the Aramco IPO could generate up to $100 billion and would give Aramco an overall valuation of $2 trillion, the largest ever.

“Chinese participation in Aramco’s IPO would be very logical and strategic,” Sadad al-Husseini, energy analyst and former Aramco executive told Reuters.

Chinese companies looking to secure crude supplies from Saudi Arabia are interested in investing in the IPO.

 

“There is a serious push from Aramco for Chinese investors to become cornerstone investors in the IPO,” an industry source told Reuters.

Another source said discussions are still in the early stages and Chinese investment in the Aramco IPO would likely be in coordination with Beijing.

Aramco is also looking to be listed on one or more international markets, including New York, London, Toronto and Asia.  The Saudi stock exchange in Riyadh will also hold a portion of the listing.

According to Reuters’ sources, Industrial and Commercial Bank of China International Holdings and China International Capital Corporation are among the Chinese banks looking for a role in the IPO.  Chinese participation in the IPO could strengthen the kingdom’s position in other Chinese investment decisions.

The nine-member board of Saudi Aramco includes Saudi Energy Minister and Aramco Chairman Khalid al-Falih, Minister of State Ibrahim al-Assaf, Aramco CEO Amin Nasser, Public Investment Fund Managing Director Yasir al-Rumayyan and royal court adviser Majid al-Moneef. Former Royal Dutch Shell Chairman Mark Moody-Stuart and former Schlumberger head Andrew Gould are also members of the Aramco board.

 

 

 

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