Bankers invited to Saudi Arabia to pitch for Aramco listing roles

Saudi Aramco has invited banks pitching for roles in its stock market listing, including Citi and Goldman Sachs, for meetings in the kingdom in the coming weeks to make their case. (Reuters)
Updated 08 January 2018
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Bankers invited to Saudi Arabia to pitch for Aramco listing roles

LONDON/DUBAI: Saudi Aramco has invited banks pitching for roles in its stock market listing, including Citi and Goldman Sachs, for meetings in the kingdom in the coming weeks to make their case, according to three banking sources familiar with the matter.
The meetings are an indication that preparations for a 2018 initial public offering, which could be the biggest IPO in history, are progressing despite market speculation it could be delayed or even shelved.
Executives from Citi, Goldman and Deutsche Bank, which are all bidding to be global coordinators for the share sale, are among the teams invited to present their pitches in person, said the three sources, including two bankers who expect to attend the meetings.
The talks will be held at the end of January or beginning of February in the Eastern Province city of Dhahran, where the state oil company is headquartered, they added.
Two of the sources said the talks would involve members of the banks’ equity capital markets teams, executives who would be directly involved in an IPO, rather than top management.
Saudi Aramco, Deutsche Bank, Citi and Goldman Sachs all declined to comment.
The stock market listing of the national champion is a central part of Crown Prince Mohammed bin Salman’s reform drive aimed at restructuring the kingdom’s economy and reducing its dependence on oil revenue.
The government, which aims to float up to 5 percent of the company this year, says Aramco is worth $2 trillion — but several industry experts have questioned whether a valuation that high is realistic.
Aramco had asked the banks to present written pitches last month, according to the sources. The oil giant told bankers not to come up with a valuation, saying it had not provided enough financial information to do so, two of the sources said.
Preparations for the IPO might be gathering speed just as the price of oil has approached $70 per barrel, the highest since mid-2015, giving Aramco a better chance to achieve its desired valuation and become the world’s most expensive company.
CROWN PRINCE
The listing is a mammoth undertaking, and any banks chosen to be global coordinators will join JPMorgan, Morgan Stanley and HSBC, who were appointed last year.
With so many banks expected to share the fee pool, the advisory mandates are not viewed in the industry as particularly lucrative. But bankers see such roles as a gateway to a host of other deals they expect to flow from the kingdom’s plan to revamp its economy. In another sign that plans for the IPO are moving ahead, Saudi Arabia has changed the status of Aramco to a joint-stock company as of Jan. 1, according to a cabinet decree published in the kingdom’s official bulletin last week. The change of status is a requirement for Saudi companies before they can list, a senior Aramco source told Reuters.
However the final decision about if and when the listing takes place rests with Crown Prince Mohammed bin Salman, according to several banking sources.


Abu Dhabi aims to lure start-ups with investment in new technology hub

Updated 24 March 2019
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Abu Dhabi aims to lure start-ups with investment in new technology hub

  • The initiative will help Abu Dhabi reduce reliance on oil
  • Mubadala hopes to attract Chinese and Indian companies

ABU DHABI: Abu Dhabi will commit up to $272 million to support technology start-ups, it said on Sunday, in a dedicated hub as part of efforts to diversify its economy.

US tech giant Microsoft will be a strategic partner, providing technology and cloud services to the businesses that join the hub as the capital of the United Arab Emirates continues its push to reduce reliance on oil revenue.
Abu Dhabi derives about 50 percent of its real gross domestic product and about 90 percent of central government revenue from the hydrocarbon sector, according to ratings agency S&P.
The emirate launched a $13.6 billion stimulus fund, Ghadan 21, in September last year to accelerate economic growth. Ghadan means tomorrow in Arabic. The new initiative, named Hub 71, is linked to Ghadan will also involve the launch of a $136 million fund to invest in start-ups, said Ibrahim Ajami, head of Mubadala Ventures, the technology arm of Mubadala Investment Co.
The goal is to have 100 companies over the next three to five years, Ajami said. “The market opportunities in this region are immense,” he added.
Mubadala, with assets of $225 billion and a big investor in tech companies, will act as the driver of the hub, located in the emirate’s financial district.
Softbank will be active in the hub and support the expansion of companies in which it has invested, Ajami said, adding that Mubadala is also aiming to attract Chinese and Indian companies, among others.
Mubadala which has committed $15 billion to the Softbank Vision Fund, plans to launch a $400 million fund to invest in leading European technology companies.
Incentives mapped out by the government include housing, office space and health insurance as part of the $272 million commitment, Ajami said.
Abu Dhabi will also announce a new research and development initiative on Monday linked to the Ghadan 21 plan, according to an invitation sent to journalists.