Saudi Aramco's record IPO starts soon, prospectus says

Saudi Aramco's record IPO starts soon, prospectus says

Aramco's oil facilities were targeted on September 14 in unprecedented attacks that temporarily shut 5.7 million barrels per day (bpd) of output - more than 5% of global oil supply.

On Friday, the 8th of November 2019, expressing a sheer caution over an upcoming Saudi Aramco IPO in the Kingdom's domestic market, President of Japan's largest refiner, JXTM Holdings told that a majority of investment companies of Japan, the world's third-largest economy, would unlikely to bank on a high-profile Aramco IPO as it became increasingly hard to evaluate the Saudi state-owned oil giant's precise market valuation over the narratives of a lower crude oil price.

The IPO will begin on November 17, with a final share price to be determined on December 5, a day after subscriptions close.

Aramco has hired a host of global banking giants including Citibank, Credit Suisse and HSBC as financial advisers to assess interest in the share sale and set a price. Similarly, the Saudi government will not offer any additional shares during the 12-month period after listing but retains the right to sell to foreign governments or investors affiliated with foreign governments.

That runs from November 17 to December 4, during which time institutional investors will be expected to submit orders.

The company stated its plans to pay out an annual dividend of at least $75 billion starting in 2020, but questions linger over how much Aramco is worth.

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However, crude prices remain about $20 a barrel lower than what the government wants.

Prince Mohammed has said listing Aramco is one way for the kingdom to raise capital for the country's sovereign wealth fund, which would then use that revenue to develop new cities and lucrative projects across Saudi Arabia.

GOVERNMENT CONTROL - The prospectus said Saudis Arabia's government determines the kingdom's maximum level of crude oil production and that public finances are highly connected to the hydrocarbon industry.

RESULTS AND CASHFLOW - The company noted that its results and cashflow are significantly impacted by global crude oil supply and demand.

Other risks listed range from the fallout of climate change on the demand and price of oil to the potential disruption of Aramco oil production to terrorist attacks and other forms of armed conflict. Saudi Arabia formally began off its very long-anticipated first common public that includes of its state-operate oil massive Saudi Aramco on Sunday, which can see a sliver of the group made out there on a group inventory alternate in hopes of boosting billions of for the dominion.

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