Aramco share sale curb rules out overseas listing for at least a year

The Saudi government plans to sell 2% of state oil giant Aramco in a domestic listing on December 11, three sources familiar with the matter said, but restrictions on future share sales mean an international IPO is ruled out for at least a year, reports Reuters.

Final pricing for the IPO (initial public offering) is scheduled for December 5 and the world’s most profitable company is expected to start trading on the Riyadh bourse six days later, the sources said.

The Saudi government will face a one-year restriction on selling more Aramco shares following the domestic listing, according to the sources, meaning any overseas IPO is unlikely to be held in 2020.

Saudi Aramco declined to comment while the Saudi government’s media office did not immediately respond to a request for comment.

READ: Saudi Arabia Aramco’s profits down by 7%

Aramco fired the starting gun on the domestic IPO on Sunday after a series of false starts. However, it did not give details on how much of the company would be sold, or when the listing would happen, while expert valuations of the company vary wildly from around $1.2 to $2.3 trillion.

Sunday’s announcement had said Aramco and the selling shareholder would be subject to restrictions on the sale, disposition or issuance of additional shares, but did not provide the lock-up period. Crown Prince Mohammed bin Salman is seeking to raise billions of dollars to diversify the Saudi economy away from oil by investing in non-energy industries.

Initial hopes for a 5% initial public offering (IPO) on domestic and international bourses were dashed last year when the process was halted amid debate over where to list Aramco overseas.

Aramco said the IPO timetable was delayed because it began a process to acquire a 70% stake in petrochemicals maker Saudi Basic Industries Corp.

Aramco roadshows for the Riyadh IPO will begin on November 18, according to the sources.