Aramco meets investors to hit IPO target

DUBAI: Saudi Aramco officials and advisers are holding last-minute meetings with investors in an attempt to achieve as close to a $2 trillion valuation as possible ahead of an expected listing launch on Sunday, Reuters reported.

Failure to reach the coveted target would cause a dilemma for Saudi Crown Prince Mohammed bin Salman - swallow the bitter pill of going ahead at a lower valuation or postpone the initial public offering (IPO) once again. The Aramco officials and advisers are meeting institutional investors around the world, said the three people familiar with the matter. Chief executive Amin Nasser has been meeting investors in New York and London this week, they added. A final meeting by the government to decide whether to go ahead should take place later on Friday, one of the sources said.

The main sticking point remains the $2 trillion valuation, which has often been considered too ambitious by advisers and some insiders, according to the three people. A valuation closer to $1.5 trillion is more likely, with wealthy Saudi families the main investors in the IPO, they said.

Saudi Aramco did not immediately respond to a request for comment on Friday, the start of the weekend in Saudi Arabia.

A weak outlook for oil prices, against a gloomy global economic picture and increasing climate change activism, could dampen investor interest, particularly in the Western world.

“Aramco’s officials and advisers are still on the road,” said one of the sources, a major institutional investor. Saudi Arabia is separately still holding government-to-government meetings to attract investment from sovereign wealth funds, the investor added.

The state-owned oil major has also approached governments in the Gulf and Asia, including China, to try and secure the bulk of the investment from countries on friendly terms with Saudi Arabia, as the reception elsewhere has been cooler, sources have previously said. To achieve $2 trillion, in the largest IPO in history, Riyadh needs the initial listing of a 1%-2% stake on the Saudi market to raise at least $20 billion-$40 billion. Prince Mohammed wants to eventually list a total of 5% of the company. An international sale is expected to follow the domestic IPO.