Saudi Aramco Taps JPMorgan, Morgan Stanley For Giant IPO

Saudi Arabia public-owned oil giant, Saudi Aramco has made a request for J.P. Morgan Chase and Morgan Stanley to help with the company’s upcoming mammoth IPO. According to a source with the direct knowledge of the matter, the company could as well call on other banks which have access to Chinese Investors.

Some of top banks in the United States have joined Moelis & Co – a boutique investment bank in being tapped for the role in what most investors and speculators expected to the biggest IPO in the world and worth about $100 billion.

HSBS Holding is leading the chase and seems set for the role which other five banks are chasing. According to the source, all the banks in the list could provide a pipeline to Chinese investors, this criteria made up the important part of the offering. However, nothing is set yet; there could still be some adjustment to the final lineup of banks.

It is worthy to mention that this IPO is a major part of the government of Saudi Arabia ambitious plan to diversify the economy beyond oil and this plan is known as “Vision 2030”. When completed, up to five percent of Saudi Aramco is likely to be listed on either one or two international market and on the Saudi Stock Exchange in Riyadh.

The world largest oil producer, as well as JPMorgan, HSBC, and Morgan Stanley refused to comment on the matter.

Our Saudi-based industry source, who choose to remain anonymous because of the sensitivity of the matter also made us to understand that Citigroup Inc was among the banks asked to pitch for an advisory role with Saudi Aramco.

The IPO plan is being head by Deputy Crown Prince Mohammed bin Salman. Apart from championing the IPO plan, Salman also oversees Saudi Arabia’s energy and economic policies. In 2016, he mentioned that he expected the IPO to value Saudi Aramco at a minimum of $2 trillion and that the figure might end up being bigger that.

There are two options that Saudi Arabia are considering to shape up the country’s  oil company when it sells shares in the national oil giant next year: The first option is to leverage a global industrial conglomerate and the second likely option is to  leverage a specialized international oil company, our source said.

 

To achieve this, Saudi Aramco, which was previously known as Saudi Arabian Oil Co, has appointed international law firm White & Case, a firm which the company has been using for a number of years now as legal adviser for its IPO, sources with the knowledge of the matter told Reuters.

According to report on Monday by Wall Street Journal, the Saudi Aramco is considering listing on New York exchange as well as London and Toronto exchange. The company has held some discussions regarding a potential secondary listing with Singapore Exchange, the source said.