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06/01/2018 - 07:00hs

Aramco becomes joint-stock company en route to IPO

The Saudi Arabian state-run oil company is being converted into a joint-stock company to pave the way for an Initial Public Offering (IPO).

São Paulo – Saudi Arabia has changed the legal status of state-run oil company Aramco to a joint-stock company, in a big step towards its plans for an Initial Public Offering (IPO). Reuters said the move happened on the first day of the year, and reported on by the Saudi official press this Friday (5).

The Saudi government expects the IPO to happen this year. The plan is to offer a 5% stake in the world’s single biggest oil producing and exporting company.

Saudi newspaper Arab News said the joint-stock move will allow the government to offer equity in domestic and foreign stock exchanges, as well as to any outside investor.

“As a customary step in the preparation process for a Saudi initial public offering (IPO), Aramco has been registered and converted from a royal decree company to a joint stock company,” Arab News quoted an Aramco spokesperson as saying. “This establishes the framework to allow future investors to hold shares in the company alongside its shareholder, the government,” he added.

The Saudi also said the IPO is expected to raise some USD 100 billion. The Saudi government estimates Aramco’s total worth at USD 2 trillion.

Following the Aramco IPO, other companies are expected to be privatized, in deals amounting to over USD 200 billion. These deals are part of Vision 2030, the Saudi economic modernization/diversification plan.

*Translated by Gabriel Pomerancblum

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