Saudi Aramco has picked Lazard Ltd. and Moelis & Co. as advisers for its initial public offering (IPO), Bloomberg reports, citing people with knowledge of the matter. This is Aramco’s second attempt at an IPO.
Reports came in on Monday that a number of international investment banks had approached the oil giant looking to be involved in the process.
Lazard had not been involved in Aramco’s first IPO attempt, which had included HSBC, JPMorgan, Morgan Stanley, Evercore, and Moelis. The boutique advisory firm had worked on Aramco’s bond sale earlier this year, however. This likely played a key role in Lazard securing its role in the IPO.
Bloomberg reported that the firm is likely to replace one of the original advisers that had worked on the IPO. A successful IPO would generate significant fees for any banks involved in the deal. Shares in Moelis and Lazard are both up on the news.
In a statement to Bloomberg, the company said, “Saudi Aramco continues to look at multiple options in the IPO process… Appropriate updates (if any) will be provided as and when available.”
Aramco is looking to sell a five percent stake for around $100 billion, valuing the company at two trillion dollars – twice the size of any other company listed worldwide and over six times the size of Exxon Mobil, the current largest listed oil company.
The Kingdom is looking to use the income from the sale to help transition Saudi Arabia into a post-hydrocarbon age as part of the Vision 2030 plan. The funds from the sale would go to the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund (SWF). Vision 2030 envisions the PIF as a giant investment vehicle which will help the Kingdom diversify its economy and reduce its reliance on oil revenue.
Initially announced in 2016, with a target to list in 2018, plans were put on hold as Aramco instead purchased a 70 percent stake of the local petrochemical firm Saudi Basic Industries Corp (SABIC) for $69 billion .
In early June, Saudi energy minister Khalid al-Falih reaffirmed that the IPO would occur within the 2020-2021 timeframe. Al-Falih also reaffirmed that following the purchase of its stake in SABIC and bond issuance, the company’s focus is now on the IPO.