Aramco's plans to list on the Saudi stock exchange, in what could be the world's largest IPO, represents a "historic moment" in the firm's evolution, its chairman Yasir al-Rumayyan said Sunday.
The firm's shares will be traded on Riyadh's Tadawul stock exchange, said Amin H. Nasser, the president and CEO of Aramco, in an online video.
The percentage of shares to be sold and the purchase price would be determined after the book-building period - a process determining investor demand for shares - it added in a statement.
The market launch of the world's most worthwhile firm types the linchpin of Prince Mohammed's bold plans to overtake the oil-reliant financial system, with tens of billions of wanted to fund megaprojects and new industries.
Bankers have told the Saudi government that investors will likely value the company at around $ 1.5 billion, below the $ 2 billion valuation promoted by Prince Mohammed when he first launched the idea of an initial public offering ( IPO) nearly four years ago.
Sources close to the initial public offering (IPO) have told AFP that Aramco is expected to sell a total of five percent on two exchanges, with a first listing of two percent on the Tadawul Saudi bourse in December. "If we consider an worldwide listing, it will be in the future".More news: Carolina Panthers place Cam Newton on injured reserve, likely ending quarterback's year
However, Aramco executives have encountered scepticism among institutional investors in London and NY on questions about the firm´s transparency, governance practices and targeted valuation, sources have told AFP.
However, the state firm said there were no current plans for an global listing, indicating that the long-discussed goal for a two-stage IPO including an offering on a foreign bourse had been put aside. "It allows Prince Mohammed to show he keeps his promises and gets things done".
He made this comment after Aramco launched its initial public offering (IPO) on Sunday by announcing its intention to float on the domestic bourse.
According to publicly available information, the Kingdom is targeting a valuation of $2 trillion for ARAMCO.
Last week, Energy Intelligence cited sources as saying they expect the Saudis to settle on a valuation of $1.6 trillion to $1.7 trillion for the firm.
It remains to be seen whether Saudi Arabia is able to find "a compromise between the crown prince's stated preference and market realities in their valuation of Aramco", said Kristian Ulrichsen, a fellow at Rice University's Baker Institute in the United States.
The IPO is aimed at raising money from domestic and global investors for the reforms.More news: World markets buoyed by growing trade optimism
While the physical damage from the attacks may have been repaired, investors remain anxious about the vulnerability of Aramco and its units to future assault, more so, given the political tensions between Saudi Arabia and Yemen that show no sign of closure - not at least in the near future.
But in terms of oil recovery costs, State-owned Saudi Aramco is perhaps the most competitive. According to financial analysts, it is worth a whopping $1.2 trillion.
April 19, 2017 China gathers state-led consortium that will act as a cornerstone investor in the Aramco IPO, people with knowledge of the discussions tell Reuters.
Riyadh is looking to list a 1-2 percent stake on the Saudi stock market to raise at least $20bn-$40bn.
From an economic perspective, it will provide funds to progress with the key megaprojects that are central to the transpiration plan, though the amount raised if 1-2% is listed is unlikely to make a significant dent in the capital requirement.
AFP with additional input by GVS News Desk.More news: John Collins apologizes, plans to appeal 25-game suspension