Saudi Aramco is starting early preparations for an international listing, just months after the oil giant turned its record initial public offering into a domestic affair and sidelined global banks, people with knowledge of the matter said.
The world’s largest publicly traded company is in discussions with Wall Street banks to draw up scenarios for a second listing overseas, according to the people, who asked not to be identified because the information is private.
Aramco wants to be ready to move ahead if Saudi Arabia’s de-facto ruler, Crown Prince Mohammed bin Salman, gives the go-ahead to proceed with the plans, the people said.
The company hasn’t set a timetable for the potential deal, the people said. An overseas listing is currently seen as unlikely to take place this year given market conditions and a weak outlook for commodity prices, according to the people.
Aramco is considering a secondary listing even after its December offering fell short of Prince Mohammed’s lofty ambitions.
The company sold less than 2% of its capital and opted for a local listing after international investors balked at his $2 trillion valuation target. Global equity indexes global markets are also feeling the weight of the coronavirus outbreak amid concerns that the epidemic is spreading outside of China and hurting corporate earnings.
Shares of Aramco are down about 5% this year after the company’s valuation briefly touched the $2 trillion mark in December. Oil, which drives its revenue, has had one of the worst annual starts in years and may come under further pressure as the virus spreads.
The oil producer is currently focusing on Asian exchanges as potential listing venues, though no final decisions have been made, the people said. Some banks that worked on Aramco’s $29.4 billion IPO last year are involved in the discussions, the people said.
Under the terms of a lock-up agreement outlined in its IPO prospectus, the Saudi government can’t sell more shares in Aramco until 12 months after the initial deal was completed, unless one third of the IPO’s joint global coordinators agree.