Dubai/London: Saudi Aramco’s board is expected to give final approvals to proceed with its mammoth share sale next week, according to people familiar with the matter.
The board is planning to meet with its advisers on the initial public offering around 17 October, the people said, asking not to be identified because the matter isn’t public. The oil giant will gauge market conditions and assess feedback from a roadshow for potential cornerstone investors that ends this week before giving the final go ahead, the people said.
Aramco is speeding up preparations for the IPO with an aim of listing on the Saudi bourse as soon as November, Bloomberg News has reported. People involved in the deal say about 2% of Aramco may be sold, which could raise $40 billion. The firm is targeting a valuation of at least $2 trillion—more than double that of Apple Inc. The sale is key to Crown Prince Mohammed bin Salman’s strategy to fund the diversification of the OPEC nation’s economy.
Investment banks’ research teams are in the midst of preparing pre-IPO reports on Aramco, according to an internal schedule seen by Bloomberg. Analysts had barely three weeks to get them done, compared with six-to-eight weeks they normally get for some of the biggest global listings.
Each bank’s team needed to finish a first draft of their analysis by 9 October, with second drafts due 15 October. The reports need to be finalized and printed by 18 October, so they can be ready to be distributed to fund managers once Aramco announces its intention to float on 20 October, the schedule shows.
While Aramco is likely to move ahead with the listing, no final decision has been made and the Saudis could still decide to delay or cancel the IPO, the people said. Aramco officials didn’t immediately respond to an email request for comment.
Meanwhile, Singapore’s Temasek Holdings Pte has decided against investing in the Aramco’s IPO, in part over environmental concerns, according to people familiar with the matter.
Temasek, which had a net portfolio value of $227 billion as of 31 March, was one of the firms being courted by Aramco for an investment.
But Temasek’s focus on sustainability and environmental, social and governance principles made it more difficult to support Aramco’s share sale, the people said, asking not to be identified because the discussions are private. A Temasek spokesman declined to comment on talks the firm may have had with individual companies, or the outcomes of any of those discussions.
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