In a Sunday statement, Saudi Aramco said it intends to sell about 1.5% of its 200 billion shares under a partial privatization for every 30 riyals (8 USD) to 32 riyals (8.53 USD).
This means that Aramco, the world's most profitable company, could have a value between $ 6 trillion ($ 1.6 trillion) and $ 6.4 trillion ($ 1.7 trillion). This makes it by far the most valuable company in the world before . Apple ( AAPL ) .
That will not be the only record to fall when Aramco achieves the higher price: at this level, stock sales would bring in just over $ 25 billion, making it slightly larger than Alibaba's ( BABA )
4 debut on the New York Stock Exchange, the largest ever IPO in the world.
Saudi Arabia is selling for the first time shares in Aramco as part of an economic diversification plan aimed at freeing the kingdom of oil.
Aramco has enormous oil reserves and a massive daily production. It has a monopoly in Saudi Arabia, the world's largest crude oil exporter. It achieved $ 111 billion in revenue in 2018 and promised to pay $ 75 billion in annual dividends by 2024.
Crown Prince Mohammed bin Salman had reportedly been seeking a valuation for Aramco in the neighborhood of $ 2 trillion. However, low oil prices, the climate crisis and geopolitical risk have sparked skepticism among international investors. Up to 0.5% of the company is sold to private individuals, with the remainder being offered to institutional investors.
Aramco may have to rely heavily on rich indigenous families, sympathetic sovereign wealth funds, or major clients such as China, who are signing up for stocks. Reuters reported on Sunday that Aramco will not market the IPO overseas.
The price of the shares will be set on 5 December and trading on the Saudi Stock Exchange is expected to begin later this month, according to the Aramco Prospectus.
Wall Street's biggest names are advising Saudi Arabia on privatization, although activists say financing fossil fuel companies will exacerbate the climate crisis. They also called on banks not to do business with the kingdom on their human rights record, including the brutal murder of Washington Post columnist Jamal Khashoggi.
Aramco listed Bank of America [ BAC ) Goldman Sachs [ GS ) JPMorgan ( ] Citigroup ( C ) Credit Suisse ( CS ) Morgan Stanley (] MS ) and HSBC ( HBCYF ) as joint financial advisors in the transaction. They all previously refused to comment on CNN Business.
– John Defterios and Julia Horowitz have contributed to this article.