Amin H. Nasser, president and CEO of Saudi Aramco, speaks during a news conference at the Plaza Conference Center in Dhahran, Saudi Arabia November 3, 2019.
Hamad Mohammed | Reuters
Saudi Aramco has set a price range for its listing that implies the oil giant is worth between $1.6 trillion to $1.7 trillion, below the $2 trillion that the Saudi crown prince had previously targeted, making it potentially the world's biggest IPO.
Aramco said on Sunday it plans to sell 1.5% of its shares or about 3 billion shares, at an indicative price range of 30 riyals ($8.00) to 32 riyals, valuing the initial public offering (IPO), as much as 96 billion riyals ($25.60 billion) at the top end of the range.
Aramco could just beat the record-breaking $25 billion raised by Chinese e-commerce giant Alibaba when it made its stock market debut in New York in 2014.
Aramco's listing is due in December and the company said last weekend that it will sell up to 0.5% of its shares to individual investors. Speculation and delayed announcements on the public listing of the world's most profitable company have riveted investors and market watchers since plans for the float were first disclosed three years ago.
The oil giant has delayed the IPO — originally scheduled for 2018 — multiple times, reportedly over Saudi concerns about public scrutiny over its finances and because of the complexity of its corporate structure.
Analysts' valuations of the company have varied from $1.2 trillion to $2.3 trillion. In comparison, Aramco's closest U.S. rival, Exxon Mobil, has a market cap of nearly $300 billion and Chevron is valued at about $229 billion. When the IPO was first flagged in 2016 by the now-Crown Prince Mohammed bin Salman, he said then that he believed the company was worth around $2 trillion.
The Aramco listing would aim to drum up cash for a government looking to significantly reduce its budget deficit and diversify its economy beyond oil as part of the crown prince's Vision 2030 program.
The country's economy is still largely reliant on oil exports. Lackluster oil prices (a barrel of Brent crude is currently priced near $63) have prompted the country's budget deficit (the amount by which its spending exceeds its revenues) to widen.
In 2018, the budget deficit was forecast at around 136 billion riyals (or around $36 billion), according to the kingdom's Ministry of Finance. It's expected to be a similar amount in 2019. And in 2020, the kingdom expects the deficit to widen to $50 billion, the kingdom's finance minister said in October, according to Reuters.
—CNBC's Natasha Turak, Holly Ellyatt and Joanna Tan contributed to this article.
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Saudi Aramco IPO set to value company up to $1.7 trillion - CNBC
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