The initial public offering of Saudi Aramco, the world’s largest oil producer, will probably take place in December. Credit Suisse has been chosen as one of the lead banks in the IPO, according to information obtained by finews.com.
The IPO of Saudi Aramco may generate as much as $40 billion, which would make it the largest ever. After several delays, the first batch of shares will be released on the Saudi exchange Talawud in December.
Financial market leaders met with government ministers from across the world in Riyadh in the past days, under the umbrella of the «Future Investment Conference».
The hottest among many key topics discussed was the Saudi Aramco IPO as bank executives were eager to hear whether it would finally take place or not. Mohammed bin Salman (MBS), the crown prince of Saudi Arabia, will make the final decision on the IPO and is said to value the company at some $2 trillion.
Swiss Interest
Tidjane Thiam, CEO of Credit Suisse and his head of Switzerland, Thomas Gottstein, were in Riyadh for the conference. The second-biggest Swiss bank will be one of the joint global coordinators of the IPO – together with two Saudi firms and a number of U.S. investment banks – according to information obtained by finews.com. Credit Suisse didn’t comment the information on Thursday.
The mandate is going to give the investment bank of Credit Suisse a major boost. The IPO will generate fees of some $350 to $450 million in total to banks that participate in the deal, analysts have said. The fees will be distributed to the banks according to the level of their participation.
The biggest shares will go to J.P. Morgan and National Commercial Bank of Saudi Arabia, the two lead banks chosen by Saudi Aramco to prepare the IPO.
Major Investments in the Country
Banks such as Credit Suisse and UBS – which will be one of the 15 bookrunners – have invested heavily to build their wealth management business in the oil-rich nation in a bid to take maximum profit from the IPO fees expected.
If no further delays occur, the pricing range will be announced on November 17. The shares can be signed from December 4 and the first trading day is slated for December 11.
Credit Suisse will likely be granted an over-allotment option, which will make the deal ever more attractive for the Swiss giant. The bank has already been part of the Alibaba IPO, which currently holds the crown of the biggest ever. The Chinese paid fees totaling $300 million to banks and advisers.
