Saudi Aramco mulls $2bn bond sale ahead of mega float in 2018

Shruti Tripathi Chopra
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London is a contender for staging the world's biggest float (Source: Getty)

Saudi Aramco is planning to raise $2bn (£1.6bn) in a bond sale ahead of what is expected to be the world's largest initial public offering (IPO).

The Saudi state-owned company is expected to start selling riyal-denominated Islamic bonds, or sukuk, as early as the second quarter, sources told Bloomberg.

HSBC and Riyad Capital are acting as advisers on the sale while NCB Capital and Alinma Investment are also working on the deal.

In October last year, Saudi Arabia raised $17.5bn in the biggest ever bond sale from an emerging-market nation.

Saudi Aramco will disclose 2017 annual statements prior to the IPO due to be held next year, the country's energy minister Khalid Al-Falih said at a seminar in Riyadh in January.

“Aramco applies the best international standards in governance and management,” Al-Falih said. “It has advanced technology. All of this qualifies it, at the appropriate time, to publish this information through its IPO programme, and we confirm that the world, without exaggeration, will be amazed.”

Read more: London could be in line for part of the $2 trillion Saudi Aramco IPO

The Saudi giant is looking at more than two stock exchanges for the float including London, New York, Hong Kong and Japan in the running.

“Even if we sold five percent, no market in the world can absorb an IPO of this size,” Al-Falih said at the seminar. “Therefore, the intention is for there to be several markets, at least two or three.”

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