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Saudi Aramco targets sovereign wealth funds to hit $2 tn valuation

Saudi Aramco sovereign wealth funds

Aramco approached wealth funds like Abu Dhabi Investment Authority and Singapore’s GIC to invest in Aramco’s domestic listing

State-owned oil giant Saudi Aramco has approached many sovereign wealth funds to invest in the company’s domestic listing as it seeks the coveted $2 trillion valuation. The list includes wealth funds such as the Abu Dhabi Investment Authority and Singapore’s GIC.

According to reports, Abu Dhabi-based Mubadala Investment has also been approached by Aramco’s representatives. However, talks are still in its initial phase.

Saudi Arabia’s Crown Prince Mohammed bin Salman wants Aramco, which is one of the largest companies in the world by revenue, to hit the $2 trillion valuation. To achieve its target, Aramco is building a strong investor base by approaching sovereign wealth funds in countries with which Saudi Arabia has friendly terms. Aramco also wants to add wealthy Saudi families to its list of investors.

According to reports, the oil giant needs the initial listing of a 1 percent stake in the domestic market to raise at least $20 billion. The company needs to beat Alibaba’s record sale of $25 billion of shares to become the world’s biggest IPO.

However, not all are convinced that Aramco will be able to reach the $2 trillion valuation. Many even described the valuation as ambitious despite Saudi Aramco going ahead with its plan to approach sovereign wealth funds.

For its initial IPO, Aramco has hired banks such as Royal Bank of Canada, Banco Santander and Japan’s Mizuho Financial Group as bookrunners, according to reports. Some of the other banks which were already hired by Aramco as bookrunners are BNP Paribas, Credit Agricole, Deutsche Bank, Gulf International Bank, Societe Generale, and UBS Group.

Aramco is expected to announce its decision to proceed with the IPO next month despite the recent attack on its oil processing facilities at Abqaiq and Khurais in eastern Saudi Arabia.

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