Saudi Aramco Asks Banks to Pitch for Roles in IPO

An Aramco oil tank is seen at the Production facility at Saudi Aramco's Shaybah oilfield in the Empty Quarter, Saudi Arabia May 22, 2018. (Reuters)

Saudi Aramco has formally asked major banks to submit proposals for potential roles in its planned initial public offering, two sources told Reuters on Monday.

Aramco’s planned IPO, which could potentially raise $100 billion, is the centerpiece of Saudi Arabia’s economic transformation drive to attract foreign investment and diversify away from oil.

Request for proposals were sent to banks few days day ago, they said.

Aramco declined to comment.

The formal IPO process follows comments by Crown Prince Mohammed bin Salman, Deputy Prime Minister and Minister of Defense, in June that the government remained fully committed to the IPO, expecting it to take place between 2020 and early 2021, after it was postponed last year.

His comments triggered a series of approaches by international investment banks which wanted to be involved, Reuters had reported citing sources.

Work on the deal, which proposed a listing in Riyadh and an international exchange, was halted in 2018 when Aramco began a process to acquire a 70% stake in petrochemicals maker Saudi Basic Industries Corp.

A third source familiar with said the move to ask banks to pitch was a key step toward the IPO going ahead, unless market conditions worsen or there is some major geopolitical event to cause a further delay.