Saudi Arabia plans to list 1 percent of state oil giant Saudi Aramco on the Saudi Stock Exchange (Tadawul) before the end of 2019 and another 1 percent in 2020, sources familiar with the matter told Reuters.
Crown Prince Mohammed bin Salman eventually wants around 5 percent of the company to be public as the centerpiece of his plan to diversify the Saudi economy away from oil, attract foreign investments and create jobs.
But rather than go straight for an initial public offering on an international stock market, the company is planning a gradual listing at home first, according to people familiar with the matter.
“The thinking now is to list one percent this year, and another next year. This will be easier for the stock market to absorb,” said one source familiar with the first stage of the planned listing.
“The smaller the target liquidity, the easier and the sooner the local IPO will be,” said the source, adding that the listing would be open to qualified foreign investors.
Aramco is preparing to sell up to a 5 percent stake by 2020-2021, in what could be the world's biggest IPO. It is still meeting banks pitching for roles on the deal, and is expected to appoint the advisers in the coming days, sources have told Reuters.
“So far there has been a discussion about the symbolic one percent to 2 percent listing on the Tadawul, with 1 percent being the consensus,” said the second source, a senior banker.
Aramco did not immediately respond to a Reuters request for comment.
Based on the indicated $2 trillion valuation that Saudi Aramco had hoped to achieve, a one percent float would be worth $20 billion - huge for the local market.
Analysts and bankers, however, say $1.5 trillion is a more achievable valuation for the world's biggest oil company.
The exact timing of the listing on Tadawul, the Middle East's largest bourse, has not yet been decided, the sources said. A third source said it might be announced at a major annual investment conference in Riyadh scheduled for the end of October.
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