Saudi Aramco Courts Investors Ahead Of IPO

26 May 2017 Issue: 60 / 21

Set to be the biggest IPO of all time, much fanfare has been made of the $100bn for the planned 5% equity sale of Saudi Aramco in 2018. But as the oil giant works to stimulate investor demand, bilateral trade deals are also being struck aimed at ensuring that economic diversification can be achieved for the long-term.

The planned 2018 flotation of a 5% share of Saudi Aramco, the kingdom’s crown jewel, will make history as the biggest IPO of all time if it raises its targeted $100bn. While there continues to be heated debate over the accuracy of the $2 trillion Aramco market value figure mooted by the kingdom, what is clear is that the success or otherwise of the listing will have a huge impact on the future development of Saudi Arabia’s economy.

The revenue generated from the Aramco IPO will be transferred to the Public Investment Fund (PIF), one of the kingdom’s sovereign wealth funds (SWF), with the stated goal of raising its capital from the current level of SR600bn ($160bn) to SR7 trillion ($2 trillion) by 2030. (CONTINUED - 1955 WORDS)