The world’s largest oil company and corporation, Saudi Arabia Oil Company, Saudi Aramco, will now proceed on its much awaited initial public offering, IPO.
This is because, the The Capital Market Authority, CMA, said it has issued its resolution approving the Saudi Aramco.
According to estimates from Reuters, the IPO could be valued at $30 billion. This is a milestone that could make the listing the biggest IPO in the history of the world.
One interesting to note is that the listing will value Aramco at about $1 trillion as opposed to the $2 trillion valuation touted by Saudi Arabia’s Crown Prince Mohammed bin Salman.
However, the current valuation still puts Aramco in front position as the largest company in the world. In it’s last financial disclosure, Aramco disclosed a net profit of about $40 billion which is ahead of many oil giants and tech companies.
CMA which is Saudi’s top capital markets regulator said the application for the registration and offering of part of its shares. The Company’s prospectus will be published prior to the start of the subscription period.
The prospectus which was shared earlier today included all relevant information that the investor needs to know before making an investment decision, including the Company’s financial statements, activities and management.
The regulator warned in its announcement that a subscription decision without reading the prospectus carefully or fully reviewing its content may involve high risk. Therefore, investors should carefully read the prospectus, which includes detailed information on the company, the offering and risk factors. Thus, providing potential investors the ability to evaluate the viability of investing in the offering, taking into consideration the associated risks.
“If the prospectus proves difficult to understand, it is recommended to consult with an authorized financial advisor prior to making any investment decision.”
The CMA’s approval on the application should never be considered as a recommendation to subscribe in the offering of any specific company. The CMA’s approval on the application merely means that the legal requirements as per the Capital Market Law and its Implementing Regulations have been met.
The CMA’s approval on the application shall be valid for 6 months from the CMA Board resolution date. The approval shall be deemed cancelled if the offering and listing of the Company’s shares are not completed within this period.