Saudi Aramco chief Amin Nasser sets out roadmap for IPO in 2021

The head of Saudi Aramco, pictured here at Davos 2017, has laid out a roadmap leading to the sale of shares in the world’s biggest oil company in 2021. (WEF)
Updated 27 January 2019
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Saudi Aramco chief Amin Nasser sets out roadmap for IPO in 2021

  • ‘The IPO is going to happen. There is no doubt the commitment is there,’ CEO tells Arab News
  • Aramco considering a major acquisition in the global gas industry

DAVOS: The head of Saudi Aramco has laid out a roadmap leading to the sale of shares in the world’s biggest oil company in 2021.
“It’s going to happen,” president and chief executive Amin Nasser told Arab News. “There is no doubt the commitment is there, and it was also further confirmed by Crown Prince Mohammed bin Salman and by the Minister of Energy Khalid Al-Falih.”
The initial public offering — potentially the biggest stock-market flotation in history — will require careful coordination over the next two years, he said.

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FULL ARAB NEWS INTERVIEW WITH AMIN NASSER HERE

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The first stage is to complete the acquisition of SABIC, the Kingdom’s industrial giant, to transform Aramco into a major player in the global petrochemicals industry.
“That will take almost until the end of 2019, or maybe a little bit more; we don’t know because you need approval from a lot of countries where SABIC has major operations,” Nasser said.
“After that you need a minimum of one year to … show what is the impact on our balance sheet — because the investors will want to see. Then you can go to the market.”
Aramco is also considering a major acquisition in the global gas industry, with potential targets in the US, Russia and Australia, Nasser revealed.
“The team is identifying opportunities and we’re at the stage of reviewing them in detail before we announce anything.”


Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

Updated 23 April 2019
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Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

  • The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios
  • SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year

RIYADH: Saudi Real Estate Refinance Co. (SRC), modelled on US mortgage finance firm Fannie Mae, aims to issue up to 4 billion riyals ($1.07 billion) of long-term sukuk this year, its chief executive said on Tuesday.

The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.

SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview.

“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between ... 2 and 4 billion riyal that we may be issuing in two tranches.

He said SRC was looking at sukuk in the 10 to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said.

He said the company was assessing whether it could also issue bonds in currencies other than the local riyal.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a program that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.

“The rule of the game for us is, like many projects across the Kingdom, attract liquidity from foreign investors,” Susini said.

He said SRC had spent 1.2 billion riyals from its balance sheet buying mortgages from local mortgage financing companies and provided liquidity to these firms.

It has also signed initial accords with several commercial banks to acquire housing mortgage portfolios.

Saudi Arabia’s housing ministry is targeting the mortgage market to reach a total value of 502 billion riyals by 2020 from around 300 billion riyals now.

The government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 reform plan.

It has been working with developers and local banks to counter a shortage of affordable housing — one of the country’s biggest social and economic problems. Saudi Arabia wants 60 percent of its nationals to own homes by 2020, up from 47 percent in 2016.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry has said.

“The goal of SRC in this market was to make sure that we will be able to refinance at least around 10 percent of the market in 2020, and 20 percent of the market by 2028,” Susini told Reuters.