RIYADH: Saudi Arabia is reportedly in talks with central Wall Street banks for a significant share sale of Aramco, marking a substantial move in the stock market.
Last month, Bloomberg reported that Citigroup Inc., Goldman Sachs Group Inc., and HSBC Holdings Plc had already enlisted to participate in the offering. It added that boutique bank Moelis & Co. has been serving as a financial advisor to aid in the selection of underwriters for the deal, the news outlet said.
“The Kingdom plans to engage JPMorgan Chase & Co. as a primary underwriter for the offering. Bank of America Corp. and Morgan Stanley are also vying for prominent roles in the deal, which could potentially amass up to $20 billion in proceeds,” Bloomberg reported, citing anonymous sources familiar with the agreement.
The parties indicated that although the lineup of advisors may evolve, more banks are expected to join before the deal starts. Final decisions on the sale’s timing and the government’s share volume remain pending.
The offering is expected to be marketed and open for a few days, allowing investors to submit their orders, according to sources.
Bloomberg said that its sources linked this structure to the one used by the Kingdom’s sovereign wealth fund for its $3.2 billion stake sale in Saudi Telecom Co. in 2022.
The news agency noted that it was unable to get comments on the matter from Aramco, Bank of America, JPMorgan, Moelis, and Morgan Stanley. It added that a follow-on offer would come four years after Saudi Arabia’s record-breaking $30 billion initial public offering for Aramco.
Several of these Wall Street banks were involved in the previous IPO, and proceeds from the impending listing could support initiatives by Crown Prince Mohammed bin Salman aimed at diversifying the economy beyond oil, Bloomberg said.
It added that despite fluctuations in energy prices and reduced production, Aramco, boasting a market value of $2 trillion, raised its dividend payout to $31 billion this month, adding that the move coincided with the Saudi government’s transfer of an additional $164 billion stake in the oil giant to its Public Investment Fund.
