Saudi Aramco publishes company prospectus ahead of its IPO. Saudi Arabia's ability to protect oil facilities will be key to Aramco's valuation.
Looking to List: Saudi Aramco took another step towards its first initial public offering (IPO) on Saturday when it released a lengthy prospectus that lays the ground for investors looking to buy into the oil giant.
In the 650-page document, Aramco revealed that 0.5% of shares will be sold to individual retail investors while not disclosing how much would be available for institutional investors.
How much of the company will be up for grabs is still unknown. But even a 2% sale would make it the world's largest IPO. As the world's most profitable company prepares to list on Saudi Arabia's Tadawul stock exchange - the listing could begin as soon as 11 December - the Saudi Crown Prince chases a staggering $2tr valuation (although analysts estimate the company's value closer to $1.5tr). AP
Safety is King: Riyadh's ability to safeguard the company's assets from security threats will be an important factor for investors calculating the company's value. Aramco conceded as much in its prospectus where, talking about risks behind investing, it said “terrorism and armed conflict may materially and adversely affect” operations.
In September, some of the company's facilities were attacked. Saudi blamed Iran, and halved its oil output for a brief period of time. Aramco's quarterly revenue declined in line with oil prices while net profit dropped at a faster rate primarily due to the attacks. WSJ
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