Long considered the world’s most valuable company, Saudi Aramco is all set to go public. The government of Saudi Arabia has said a small portion of the world’s largest oil company will go public. The kingdom has valued Saudi Aramco at more than $2 trillion. Apple, the most valuable publicly traded company, has a market capitalization of about $585 billion.
The powerful young Prince Mohammed bin Salman overseeing Saudi Arabia’s economy unveiled ambitious plans on Monday aimed at ending the kingdom’s “addiction” to oil and transforming it into a global investment power.
So big is the state oil company because of its rights to the kingdom’s crude reserves, that selling even 1 per cent of its value would create the biggest initial public offering (IPO) on earth, he said.
At the centre of the plan is the restructuring of its Public Investment Fund (PIF), which Prince Mohammed said would become a hub for Saudi investment abroad, partly by raising money through selling shares in Aramco.
Asked where Riyadh would find the funds for a $2 trillion dollar fund after recent borrowing, he said it would come from transferring the ownership of Aramco to the PIF.
Prince Mohammed said Aramco would be transformed into an energy company that he expected to be valued at $2 trillion to $3 trillion, and that less than 5 per cent of it would be listed on the stock market.
He said other Aramco subsidiary companies would also be listed along with other publicly held companies, and added that one major benefit of privatisation was that it would increase transparency and help limit corruption.
“People used to be unhappy that files and data of Aramco are undeclared, unclear and not transparent. Today they will be transparent. If Aramco gets IPO-ed that means it has to announce its statements of accounts,” he said.