Saudi Aramco announces intention to float on Tadawul
The Capital Market Authority approved Saudi Aramco's application for an initial public offering
Saudi Aramco has officially announced its intention to float some of its shares on the Saudi exchange (Tadawul). The final offer price, number of shares to be sold, and percentage of shares will be determined and announced following the book-building period.
"The company’s strategy is underpinned by long-term, exclusive access to the Kingdom’s unique hydrocarbon resources, which it manages in order to optimise production and maximise long-term value," said Yassir Othman Al-Rumayyan, chairman of Saudi Ararmco. "At the same time, the company seeks to preserve the low carbon intensity of its crude oil production to demonstrate its ongoing commitment to sustainability.
"The company has a strong track record of creating value for its current shareholder, the government. I look forward to welcoming new shareholders who, I am confident, will benefit from the company’s reliability and continued growth," he added.
In a statement sent to media, Saudi Aramco announced that the Capital Market Authority approved its application for an initial public offering. The company confirmed that it plans to declare $75bn ordinary cash dividends in 2020.
Saudi Aramco is expected to float a small percentage of its shares on Tadawul, with a potential international listing to eventually follow.
"Our mission is to provide our shareholders with long-term value creation through crude oil price cycles by maintaining our pre-eminence in oil and gas production, capturing additional value across the hydrocarbon value chain and profitably growing our portfolio," Saudi Aramco CEO Amin Nasser said.
"Building on our position amongst the world’s least carbon intense sources of crude oil, Saudi Aramco aims to grow its business sustainability by leveraging technology and innovation to lower our climate impact. We deploy technology, with the aim of producing oil and gas ever more efficiently, reliably and sustainably.
"With a comprehensive and disciplined process for capital expenditures, we seek to maintain a prudent and flexible balance sheet. Our approach delivered higher operating cash flow, higher Free Cash Flow, higher EBIT, higher EBITDA and higher ROACE than each of the Five Major IOCs in 2018G. This supports our commitment to sustainable and growing dividends through crude oil price cycles by effectively utilizing our free cash flow while maintaining low targeted gearing ratios," Nasser added.
Saudi Aramco's IPO is the cornerstone of Crown Prince Mohamad bin Salman's economic diversification programme, and he is seeking a valuation of $2trn. The IPO is widely expected to be the world's largest, surpassing Alibaba Group Holding's $25bn listing.