Deutsche Bank: ‘No reason to doubt’ Saudi Aramco IPO is on track for 2018
The station’s English arm later offered more details, saying that a final price for the stock will be set Dec. 4, with shares then beginning to be traded on the Riyadh-based Tadawul http://jondeverell.com/0-16-bat-usd/ stock market on Dec. 11. It added that the Saudi Capital Markets Authority will make a formal announcement about the IPO plans on Sunday. Pricing will begin Nov. 17, it said.
Ma’aden could, therefore, become a major metals company. Along the lines of industrial acquisitions in the West. SABIC’s agri-nutrient http://sinchonyoga.si-soft.or.kr/kurs-ardor-na-segodnja-grafik-ardor-kurs-ardr-k/ division making mostly urea is not profitable and not in the line of businesses that Saudi Aramco has been pursuing.
Jubail Refinery and Petrochemical Project – we advised Saudi Aramco Total Refining and Petrochemical Company (SATORP), a joint venture company established by Saudi Aramco and Total, on the USD14.2bn project which entails the development of a greenfield refining and petrochemical plant in Saudi Arabia. The financing involved 19 different facilities with seven export credit agencies and two different Islamic facilities (an istisna’a-ijara and a wakala-ijara) and the total debt raised was approximately USD8.5bn. DUBAI—Saudi Arabia’s national oil company is complicating a plan to use its wealth to finance the kingdom’s economic overhaul, arguing for a discount in its government-engineered acquisition of the state petrochemicals firm, people familiar with the discussions said Wednesday. On Monday, Saudi Aramco’s chief executive Amin Nasser told CNBC the plan to take a portion of the oil giant’s business public in 2018 remained on track. Reportedly, Saudi Aramco has appointed JPMorgan Chase, Morgan Stanley and HSBC to assist with its mammoth IPO next year.
Structure of the payment to the PIF for the SABIC shares
The Saudi Ministry of Energy, Industry, and Mineral Resources (MOE) 131 As disclosed to the author in 2018 by a senior Saudi official who had intimate knowledge of the deal and the oil/chemical business in the kingdom. While Saudi prices for natural gases are low, Saudi production costs are also very low. So one can argue that the Saudis are not dumping (i.e., selling below cost) in an international trade sense. On the other hand, the low prices allow users of natural gas in the kingdom to have extremely low production costs. However, the low cost at which SABIC gets its feedstock (methane, ethane, etc.) means that when Aramco takes over SABIC and the cost of feedstock is consolidated, the oil company will not see any cut in its overall costs, thereby negating one of the main potential synergies of the deal.
One difficulty with this is forecasting what the price of crude oil will be over the longer-term. A higher future oil price would imply a more expensive valuation. MbS is looking to fund the investment required to rebalance the economy through an expected 5% sale of Aramco. It is thought that it will initially list just 1% of the company on its local exchange and then an equal proportion on an international stock exchange.
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For further information, please contact [email protected] or visit www.rns.com. Within the NatWest Markets franchise, RBS will recognise an income gain on disposal of the Alawwal bank stake for shares received in SABB of £0.4 billion and a reduction in risk weighted assets (“RWAs”) of £4.7 billion. The Royal Bank of Scotland Group plc (“RBS”) notes the completion of the merger of Alawwal bank and Saudi British Bank (“SABB”) announced on 16 June 2019 (the http://www.sertex.co.cr/index.php/2019/10/01/zhdet-li-stratis-bolshoe-kriptobudushhee-happy/ “Merger”). And arguably a state oil firm like Saudi Aramco should trade at a discount to reflect the corporate governance risks associated with possible government interference not to mention the bubbling geo-political tensions in the Middle East. Speaking on the sidelines of the third edition of the Future Investment Initiative in Riyadh, Saudi Arabia, he explained that the bank had wide-ranging assets across the world worth more than $1 trillion.
The short-term outlook is based mainly on its exposure to oil – therefore, the oil price. Saudi Aramco was originally planning on going public to raise capital for the kingdom’s sovereign wealth fund, the Public Investment Fund (PIF), which it was expected to join. At the time, it was anticipated that the listing would push the fund’s value up to $3 trillion. However, the PIF no longer needs the cash injection so Saudi Aramco is now focusing on raising money for its own diversification and is no longer expected to be brought under the PIF’s umbrella. If IG offers a ‘grey market’ ahead of the Saudi Aramco IPO, you could speculate on the company’s share price before it lists on an exchange.
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- 132 On September 7, 2019, the Saudi Ministry of Energy, Industry and Minerals was split into two entities, the Ministry of Energy and the Ministry of Industry.
- SABIC’s agri-nutrient division making mostly urea is not profitable and not in the line of businesses that Saudi Aramco has been pursuing.
- The combined value of the two Marjan contracts is in excess of $4.5 billion.
- Prince Mohammed hopes for a very-optimistic $2 trillion valuation for Aramco, which produces 10 million barrels of crude oil a day and provides some 10% of global demand.
- Saudi British Bank in October 2018 finalised an agreement to buy Alawwal Bank for USD5 billion, creating the kingdom’s third-largest lender with USD71 billion in assets.
Al-Falih was replaced by PIF Chief Executive Officer (CEO) Yasir Al-Rumayyan. In spite of these significant events, the new leaderships at Aramco and the ministry are proceeding with the IPO of Aramco, although it is likely that some delay will be incurred. On the other hand, these developments should not directly affect the Aramco-SABIC merger. However, the shifts in leadership will have lasting implications for Aramco’s future strategy and direction, and they throw the tensions between Saudi technocrats and MBS into sharp relief, highlighting the importance of understanding the dynamics between SABIC, Aramco, and the PIF.
The IPO was first touted in 2016 by Mohammad bin Salman, who is now the kingdom’s Crown Prince and arguably Saudi Arabia’s de facto ruler. MbS, as he is colloquially referred as, also holds the position of Chairman of the Council of Economic and Development Affairs (CEDA) and one of his highest priorities is reducing the country’s reliance on crude oil production as part of CEDA’s Saudi Vision 2030. Plans for the IPO were announced in 2016 but Saudi Aramco, the world’s most profitable company, pushed back the date several times due to bookkeeping and corporate structure issues.
It could also open a discussion on transparency. If Aramco is expected to be transparent to be accepted by the world financial markets, the PIF would be required to be transparent as well. It is quite clear to observers of the Saudi state investment scene that the PIF does not want to be transparent. The PIF is under the control of its chairman, MBS, who seeks to direct the type of investments deemed necessary under Vision 2030, a plan that he spearheads and implements without extensive discussions or consensus building.
The company secured more than $4.5 billion in work from the most recent project at Saudi Aramco.
From a purely credit quality standpoint, for a company that has $294 billion in assets, financed for 75 percent by equity, 134 Saudi Arabian Oil Company Base Prospectus. Computed from the consolidated audited figures. Thus, for the IPO proceeds to go to the PIF, the MOE would have had to donate the funds to the PIF, which opens a bureaucratic can of worms. Would the transfer be merely a gift or an acquisition of an ownership interest in the PIF?
Saudi Aramco is the world’s largest oil and gas company, based on both revenues and profit. The company produces around ten million barrels of crude oil per day, or 15% of the world’s oil supply, and generated a massive $111 billion in net income in 2018 (as a comparison Apple made $59 billion profits). (Alliance News) – Royal Bank of Scotland Group on Monday said the completion of the merger between two Saudi Arabia based banks – Alawwal bank and Saudi British Bank – will lead to a “positive and material financial impact” on the UK listed lender. Earlier today, Bloomberg reported that Saudi Aramco had awarded $18 billion in various contracts designed to increase production at two of its offshore oil and gas facilities.
In order to issue publicly traded bonds or sell equity shares on the world’s financial markets, Aramco would have to provide independently audited financial statements of its extensive operations and audited disclosures of the oil resources to which it has access. On April 1, 2019, the company eventually issued a 450-page prospectus for the issuance of the “Global Medium Term Note Programme.” 111 Saudi Arabian Oil Company Base Prospectus. The funds would be earmarked for transfer to the PIF to use in its investment strategy of buying high-tech, non-oil related firms locally and overseas to diversify the Saudi economy. The privatization effort turned out to be much more complicated than expected, as the financial markets insisted that Aramco provide full disclosure of all its activities, assets, liabilities, profits, and losses, a mammoth task for a company with sales of over $355 billion, numerous joint ventures, and without any previously published data. Aramco has, meanwhile, ramped up its efforts to privatize through an initial private offering (IPO).
Saudi state media and government officials did not immediately acknowledge the report. Saudi Aramco said it “does not comment on rumor or speculation,” but did not dispute the report.